If the marginal revenue curve lies above the demand curve for a firm: A) Both curves are parallel...
Question:
If the marginal revenue curve lies above the demand curve for a firm:
A) Both curves are parallel
B) Both curves are downward sloping
C) This must be a monopolistically competitive firm
D) This is not a firm that exists in any traditional industries.
E) Both curves are upward sloping.
Marginal Revenue:
Marginal revenue equals changes in total revenue (i.e., the market price times the quantity sold) with respect to one unit increases in the quantity. Marginal revenue decreases with the quantity.
Answer and Explanation: 1
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View this answerWe have {eq}TR=P(Q)Q {/eq}. Thus, {eq}\displaystyle MR=TR'=P(Q)+\frac{dP(Q)}{dQ}Q {/eq}
Thus, for a regular good that its demand curve downward...
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Marginal Revenue: Definition & Equation
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Chapter 2 / Lesson 13
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Learn about marginal revenue and understand how to use the marginal revenue formula. See how to calculate marginal revenue and the impact of price and marginal cost.
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