For which firms is it possible to have a negative marginal revenue?:

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue as a result of selling one additional unit. In a competitive market, each seller takes the market price as given, and the marginal revenue is equal to the price. However, in a monopoly market, the monopolist has to lower the price of all units to sell one extra unit, leading to a negative marginal revenue. Therefore, it is only possible for a monopoly firm to have a negative marginal revenue.

For Which Firms Is It Possible to Have a Negative