If a firm faces a downward- sloping demand curve the marginal revenue curve will be__________ and lay ___________ the demand curve.
A) downward sloping; above
B) horizontal; above
C) horizontal; below
D) downward sloping; below

Question

Quizplus · Accepted Answer

For a firm with a downward-sloping demand curve, the marginal revenue curve is also downward sloping and lies below the demand curve because each additional unit sold adds less to total revenue than the previous one.

If a Firm Faces a Downward- Sloping Demand Curve the Marginal