downward-sloping marginal revenue curves, as Figure 9.5 shows.

Notice that marginal revenue is zero at a quantity of 7, and turns negative at quantities higher than 7. It may

seem counterintuitive that marginal revenue could ever be zero or negative: after all, doesn't an increase in

quantity sold not always mean more revenue? For a perfect competitor, each additional unit sold brought a

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9.2 • How a Profit-Maximizing Monopoly Chooses Output and Price 225

positive marginal revenue, because marginal revenue was equal to the given market price. However, a

monopolist can sell a larger quantity and see a decline in total revenue. When a monopolist increases sales by

one unit, it gains some marginal revenue from selling that extra unit, but also loses some marginal revenue

because it must now sell every other unit at a lower price. As the quantity sold becomes higher, at some point
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