When a firm's demand curve is downward-sloping,its marginal revenue at any positive sales quantity is ______ its price.
A) greater than
B) less than
C) equal to
D) less than or equal to

Question

Quizplus · Accepted Answer

When a firm's demand curve is downward-sloping, it means that in order to sell more units, it must lower the price. Therefore, the marginal revenue it earns from selling an additional unit will always be less than the price. This is because the firm must lower the price for all units sold in order to sell an additional unit, resulting in a lower total revenue increase than if the price stayed constant.

When a Firm's Demand Curve Is Downward-Sloping,its Marginal Revenue at Any