If a firm’s marginal revenue is less than price at all levels of output, this means that _____.

it must lower its price to sell an additional unit of outputCorrect
there are a large number of buyers and sellers in the market
there are no barriers to entry and exit in the market
it is a price taker in the market

Explanation
A firm that faces a downward-sloping demand curve can sell additional units only by lowering price. Therefore, the marginal revenue curve will lie below the average revenue (price) curve.