Marginal revenue is the additional revenue that companies make when they sell mo

Question

Marginal revenue is the additional revenue that companies make when they sell more copies of Vista. Think about your answers to the previous questions. You should have found that the marginal revenue for Microsoft is different from the marginal revenue for computer retailers.

The difference helps to explain why Microsoft earns higher profit margins than retailers. Every firm sets marginal revenue equal to marginal cost when making any decision. Because of the different shapes of their marginal revenue curves, the price at which Microsoft sells Vista is ________ its marginal cost, while the price at which retailers sell Vista is ________ their marginal cost.



A. Equal to; greater than

B. Equal to; less than

C. Greater than; less than

D. Greater than; equal to

Explanation / Answer

D. Greater than; equal to

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