For a single-price monopolist, marginal revenue is:

• A. greater than the price of the product for all units sold
• B. equal to the price of the product for every unit sold
• C. less than the price of the product for all units except the first
• D. always zero regardless of output level

Answer: (C)

Verified step by step guidance

1. Recall that a single-price monopolist faces a downward-sloping demand curve, meaning that to sell additional units, the monopolist must lower the price on all units sold.
2. Understand that marginal revenue (MR) is the additional revenue gained from selling one more unit of output, which differs from price because lowering the price affects revenue from all previous units.
3. Express marginal revenue mathematically as the derivative of total revenue (TR) with respect to quantity (Q): \(MR = \frac{dTR}{dQ}\), where \(TR = P(Q) \times Q\) and \(P(Q)\) is the inverse demand function.
4. Recognize that because the monopolist must reduce price to sell more units, marginal revenue is less than the price for all units after the first, since the price cut reduces revenue on earlier units sold.
5. Conclude that marginal revenue equals price only for the first unit sold, and for all subsequent units, marginal revenue is less than the price, reflecting the monopolist's trade-off between price and quantity.