When a firm faces a downward-sloping demand curve,marginal revenue
A)is constant regardless of how much output the firm produces
B)is less than price
C)increases as the firm produces more output
D)decreases if the firm produces less output
E)is equal to the price per unit of output

Question

Quizplus · Accepted Answer

When a firm faces a downward-sloping demand curve, the only way to sell more output is to lower the price of the goods. Therefore, the marginal revenue generated from an additional unit of output will always be less than the price of the good.

When a Firm Faces a Downward-Sloping Demand Curve,marginal Revenue