Scenario 9.2
Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments.
-When a firm's average revenue falls, the marginal revenue also falls and is less than the average revenue.

Question

Quizplus · Accepted Answer

When average revenue falls, marginal revenue typically falls as well and is less than average revenue in a downward-sloping demand curve, which is common in imperfect competition scenarios.

Scenario 9.2 Consider a Publicly Held Firm (One Whose Stock Shares Are