1,650

2,500

4,000

6,400

TABLE 9.2 Total Costs and Total Revenues of

HealthPill

Total revenue, though, is different. Since a monopolist faces a downward sloping demand curve, the only way it

can sell more output is by reducing its price. Selling more output raises revenue, but lowering price reduces it.

Thus, the shape of total revenue isn’t clear. Let’s explore this using the data in Table 9.2, which shows

quantities along the demand curve and the price at each quantity demanded, and then calculates total revenue

by multiplying price times quantity at each level of output. (In this example, we give the output as 1, 2, 3, 4, and

so on, for the sake of simplicity. If you prefer a dash of greater realism, you can imagine that the

pharmaceutical company measures these output levels and the corresponding prices per 1,000 or 10,000

pills.) As the figure illustrates, total revenue for a monopolist has the shape of a hill, first rising, next flattening
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