Which of the following statements is correct for the case of a downward-sloping demand curve (beyond the first unit of output)? A)P = AR = MR B)P = AR MR C)P AR MR D)P = AR

Question

Which of the following statements is correct for the case of a downward-sloping demand curve (beyond the first unit of output)?
A)P = AR = MR
B)P = AR > MR
C)P > AR > MR
D)P = AR < MR

Quizplus · Accepted Answer

For a downward-sloping demand curve, price (P) equals average revenue (AR), but marginal revenue (MR) is less than both because each additional unit sold lowers the price for all units sold.

Which of the Following Statements Is Correct for the Case