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 has to lower the price of its product to sell additional units, which means the marginal revenue will always be less than the price. This is because the firm has to lower the price for all units sold, not just the additional units sold, in order to increase demand.

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