[MUSIC] I'd like us to take a few more minutes discussing why, in the case of monopoly, the marginal revenue is less than the price. And let's go through a numeric example. Suppose we're giving a demand curve quantity equals 150-P, or the inverse command curve, the way I'm going to draw it, is price is equal to 150-Q. So again, this is my demand curve. The intercept is 150 and it's a straight line with a slope of 1. And just for the sake of example, suppose we start off with a price of $100 per unit, which means we're selling 50 units. And we can find that point along the demand curve. Here's 100 and here's the quantity of 50 units. This is a point along the demand curve. We can go head and calculate the revenue. 100 times 50 is equal to $5,000. Now suppose the monopolist wants to sell an additional unit. They cannot sell the additional unit at $100. We know this from the demand curve, because this point here, 51 and 100, is simply not on the demand curve. The only way the monopolist can sell one more unit is by lowering the price. And we can see from the equation that in order to sell 51 units, the price has to go down to $99. Well, what would be the revenue in this case? At the price of $99 we are going to sell 51 units, and if we multiply 99 by 51 we get 5,049. What is marginal revenue? It is the change in revenue from selling the additional unit. It is the difference between these two revenues, and we can see that the marginal revenue is equal to $49. And what I want to emphasize is that this is less than $99, which is the price. So that is one numerical example. Let's go ahead and look at a graphic interpretation as well.