In relation to the downward-sloping, straight-line demand curve, the MR curve falls

Question

Quizplus · Accepted Answer

In the case of a downward-sloping straight-line demand curve, the marginal revenue (MR) also slopes downwards and falls below the demand curve. This is because when a seller wants to increase their revenue by selling more units of a good, they have to lower the price for all units sold, which results in a decrease in marginal revenue for each additional unit sold. Therefore, the correct answer is A - below.

In Relation to the Downward-Sloping, Straight-Line Demand Curve, the MR