Another way to say that marginal revenue is less than the price at a given level of output is that:
A) the marginal output curve lies below the demand curve.
B) the marginal revenue curve lies above the demand curve.
C) the marginal revenue curve is the same as the demand curve.
D) the marginal revenue curve lies below the demand curve.

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue resulting from a one-unit increase in output. When the marginal revenue is less than the price of output, it means that the additional revenue earned from selling one more unit is less than the price at which it is sold, indicating that the marginal revenue curve lies below the demand curve. Therefore, option D is the correct answer.

Another Way to Say That Marginal Revenue Is Less Than