The marginal revenue curve for a price setter will always:
A) bisect any horizontal line drawn between the vertical axis and the demand curve.
B) bisect any vertical line drawn between the horizontal axis and the demand curve.
C) lie above and to the right of the demand curve.
D) be less steeply sloped than the demand curve.

Question

Quizplus · Accepted Answer

The marginal revenue curve for a price setter will always bisect any horizontal line drawn between the vertical axis and the demand curve. This is because the marginal revenue curve is the slope of the total revenue curve, and the total revenue curve is the area under the demand curve. Therefore, the marginal revenue curve will always be equal to the height of the demand curve at any given quantity.

The Marginal Revenue Curve for a Price Setter Will Always