The statement that is true about marginal revenue is
A)If marginal revenue is zero, it means that quantity demanded falls to zero when a firm changes its price.
B)If marginal revenue is negative, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
C)If marginal revenue is positive, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
D)Marginal revenue increases as price falls and quantity sold increases.

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue when one more unit of a good is sold. If marginal revenue is negative, it means that the revenue lost from receiving a lower price on all the units that could have been sold at the original price is greater than the additional revenue received from selling one more unit of the good. This is because when the price is lowered to sell more units, the revenue from each unit sold is less. Therefore, the statement that is true about marginal revenue is that if it is negative, the additional revenue received from selling one more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.

The Statement That Is True About Marginal Revenue Is