The Theory of Imperfect Competition Marginal Revenue and price Marginal revenue is always less than the price The relationship between marginal revenue and price depends on two things How much output the firm is already selling The slope of the demand curve > It tells us how much the monopolist has to cut his price to sell one more unit of output Copyright C 2003 Pearson Education, Inc Slide 6-11Copyright © 2003 Pearson Education, Inc. Slide 6-11 • Marginal Revenue and Price – Marginal revenue is always less than the price. – The relationship between marginal revenue and price depends on two things: – How much output the firm is already selling – The slope of the demand curve » It tells us how much the monopolist has to cut his price to sell one more unit of output. The Theory of Imperfect Competition