For a downward-sloping demand curve, marginal revenue decreases as quantity sold increases.

Question

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Marginal revenue is the additional revenue earned from selling one extra unit of a product. In the case of a downward-sloping demand curve, in order to sell more units, the seller has to reduce the price of the product. As a result, the marginal revenue earned from each additional unit sold will decrease because the revenue generated from the last unit sold is lower than the revenue generated from the previous units sold. Therefore, when the demand curve is downward-sloping, marginal revenue decreases as quantity sold increases.

For a Downward-Sloping Demand Curve, Marginal Revenue Decreases as Quantity