When marginal revenue is negative,demand is:
A) elastic.
B) inelastic.
C) unit elastic.
D) There is not sufficient information to classify the elasticity of demand.

Question

Quizplus · Accepted Answer

When marginal revenue is negative, it means that an increase in sales results in a decrease in total revenue. This happens when demand is inelastic, meaning that a change in price does not significantly affect the quantity demanded. Therefore, the correct choice is B - inelastic.

When Marginal Revenue Is Negative,demand Is