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When a Firm Faces a Downward-Sloping Demand Curve, Marginal Revenue

Question 40

Multiple Choice
When a firm faces a downward-sloping demand curve, marginal revenue
A)must exceed price because the price effect outweighs the output effect.
B)is less than price because a firm must lower its price to sell more.
C)equals price because the firm sells a standardized product.
D)must exceed price because the output effect outweighs the price effect.

When a firm faces a downward-sloping demand curve, marginal revenue


A) must exceed price because the price effect outweighs the output effect.
B) is less than price because a firm must lower its price to sell more.
C) equals price because the firm sells a standardized product.
D) must exceed price because the output effect outweighs the price effect.

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