Table 7.1
-Refer to Table 7.1, which shows the relationship between the price that Gladys charges for a product and the quantity of that product that Gladys sells. Gladys' marginal revenue becomes negative starting with the production of which unit?
A) 2
B) 4
C) 6
D) None of the above; marginal revenue is always positive or zero.

Question

Table 7.1
-Refer to Table 7.1, which shows the relationship between the price that Gladys charges for a product and the quantity of that product that Gladys sells. Gladys' marginal revenue becomes negative starting with the production of which unit?
A) 2 
B) 4 
C) 6 
D) None of the above; marginal revenue is always positive or zero.

Quizplus · Accepted Answer

Marginal revenue becomes negative when the additional unit sold decreases total revenue. This typically occurs when the price reduction needed to sell an additional unit is greater than the revenue gained from selling that unit.

Table 7.1 -Refer to Table 7.1, Which Shows the Relationship Between the Between