Total revenue decreases as output increases whenever:
A) marginal revenue is less than average revenue.
B) marginal revenue is greater than average revenue.
C) average revenue is decreasing.
D) marginal revenue is negative.
E) average revenue is negative.

Question

Quizplus · Accepted Answer

Total revenue decreases as output increases when marginal revenue is negative, because marginal revenue represents the change in total revenue from selling one more unit. If this value is negative, it means that selling an additional unit reduces total revenue.

Total Revenue Decreases as Output Increases Whenever