A demand curve that is downward sloping will ensure that: A) P = MR. B) P MR. C) P

Name: A demand curve that is downward sloping will ensure that: A) P = MR. B) P > MR. C) P < MR. D) P = MC.
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Question

A demand curve that is downward sloping will ensure that:
A) P = MR.
B) P > MR.
C) P < MR.
D) P = MC.

Quizplus · Accepted Answer

In a downward sloping demand curve, price (P) is always greater than marginal revenue (MR) because as quantity increases, the price per unit decreases to sell the additional units, thus making the additional revenue gained from selling one more unit (MR) less than the price at which the unit is sold.

A Demand Curve That Is Downward Sloping Will Ensure That