When marginal revenue is negative for a linear (inverse)demand function,increases in output will cause total revenues to:
A) increase.
B) decrease.
C) remain unchanged.
D) There is not sufficient information to answer the question.

Question

Quizplus · Accepted Answer

When marginal revenue is negative for a linear (inverse) demand function, it means that the demand for the good decreases as the quantity increases. This implies that an increase in output will lead to a decrease in total revenue. Therefore, the correct answer is B - decrease.

When Marginal Revenue Is Negative for a Linear (Inverse)demand Function,increases