If marginal revenue from the sale of the last unit is negative, the firm should increase the price.

Name: If marginal revenue from the sale of the last unit is negative, the firm should increase the price.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If marginal revenue is negative, it means that selling an additional unit decreases total revenue, suggesting that the firm is selling too many units at too low a price. Increasing the price could reduce the quantity sold but increase total revenue.

If Marginal Revenue from the Sale of the Last Unit