If marginal revenue is negative for a certain level of output:
A) it must be an oligopoly.
B) the price being charged is too high.
C) total revenue is increasing.
D) demand is inelastic with respect to price.

Question

Quizplus · Accepted Answer

When marginal revenue is negative, it indicates that a decrease in price leads to a proportionally smaller increase in quantity demanded, meaning demand is inelastic.

If Marginal Revenue Is Negative for a Certain Level of Output