If a firm enjoys a revenue of $500 from two units of output and $600 from three units of output,then its marginal revenue must be rising.

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue from selling one more unit. Here, the marginal revenue from the third unit is $100 ($600 - $500), which is less than the revenue from the second unit ($500/2 = $250), indicating that marginal revenue is not rising.

If a Firm Enjoys a Revenue of $500 from Two