Marginal Revenue is
A) the increase in total revenue from selling one more unit of output.
B) equal to P(1+1/ε).
C) equal to P when the price elasticity of demand is infinite.
D) All of the above.

Question

Quizplus · Accepted Answer

Marginal Revenue (MR) is defined as the increase in total revenue from selling one more unit of output, which matches choice A. The formula MR = P(1 + 1/ε), where P is the price and ε is the price elasticity of demand, is a standard economic formula for marginal revenue under imperfect competition, corresponding to choice B. When the price elasticity of demand is infinite, it implies a perfectly elastic demand curve, where the price does not change with quantity, making marginal revenue equal to the price (P), as stated in choice C. Therefore, all the given statements are correct descriptions of marginal revenue.

Marginal Revenue Is