A firm facing a downward-sloping demand curve sells 50 units of output at $10 each.Which of the following can be concluded about the firm's marginal revenue for this output level?
A)Marginal revenue is equal to $500.
B)Marginal revenue is more than $10.
C)Marginal revenue is equal to $10.
D)Marginal revenue is less than $10 but more than zero.
E)Marginal revenue is zero.

Question

Quizplus · Accepted Answer

For a firm facing a downward-sloping demand curve, the marginal revenue is less than the price because to sell additional units, the firm must lower the price on all units sold.

A Firm Facing a Downward-Sloping Demand Curve Sells 50 Units