L
Limblight
Guest
from my AP Economics:
One characteristic of Monopoly is that price>marginal revenue. Through calculus calculating, I can see why MR = P + (dP/dQ)Q, thus following a downward slope, MR < P. But I don't understand why this happens. I think revenue is the money received by selling one more unit of goods, and this money received should be the price, so MR = P in any case (monopoly, perfect competition, etc.). Can anyone explain this to me?
P.S. I am an international student so I have never taken any AP classes.
One characteristic of Monopoly is that price>marginal revenue. Through calculus calculating, I can see why MR = P + (dP/dQ)Q, thus following a downward slope, MR < P. But I don't understand why this happens. I think revenue is the money received by selling one more unit of goods, and this money received should be the price, so MR = P in any case (monopoly, perfect competition, etc.). Can anyone explain this to me?
P.S. I am an international student so I have never taken any AP classes.