When a demand curve is a downward sloping straight line, the slope of the demand curve is ________ the marginal revenue curve.
A) always equal to the slope of
B) the same as the slope of
C) half as steep as
D) twice as steep as

Question

Quizplus · Accepted Answer

When a demand curve is a downward sloping straight line, the marginal revenue curve has the same intercept as the demand curve but is twice as steep. This is because the marginal revenue takes into account the effect of lowering the price on all units sold, not just the additional unit.

When a Demand Curve Is a Downward Sloping Straight Line