When marginal revenue is positive for a linear (inverse)demand function,decreases 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 positive for a linear inverse demand function, the demand is elastic. This means that decreases in output will result in a more than proportional decrease in total revenue, causing it to decrease. Therefore, the correct answer is B.

When Marginal Revenue Is Positive for a Linear (Inverse)demand Function,decreases