Monday, 10 February 2014

Demand curve in Monopoly market

Monopoly demand is the industry or market demand and is therefore downward sloping.price will exceed marginal revenue because the monopolist must lower price to boost sales and cannot price discriminate in most cases.

when the price in P1,demand in Q1 fixed,but if the price fall down to P2,the demand will be increased.
the added revenue will be the price of the last unit less the sum of the price cuts which must be taken on all prior units of output.the marginal revenue curve is below the demand curve.

No comments: