Answer
A monopolist's marginal revenue is less than the price of its good since the monopolist is the only producer of a good in the market. Also, when the monopolist increases production by an additional unit, the price of the good falls. In turn, this reduces the amount of revenue the monopolist earns on all units sold. Due to this, the marginal revenue of a monopolist is always less than the price of the good.
Work Step by Step
Marginal revenue can be negative. For a monopolist, the marginal revenue is the same as the marginal cost. An item can have a negative marginal cost, so the marginal revenue can be negative.
