If the demand for the single-price monopoly's good is elastic, what is the relationship between the market price and the firm's marginal revenue?

Question

Answer

A cut in the monopoly's price makes marginal revenue negative.

Answer

A cut in the monopoly's price decreases marginal revenue by less than the price cut.

Answer

Marginal revenue and price change by the same amount.

Answer

A cut in the monopoly's price decreases marginal revenue by more than the price cut.

Answer

Marginal revenue is unchanged when the monopoly lowers its price.

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