Figure 7.2
-Refer to Figure 7.2.Why is the total revenue curve a ray from the origin?
A) Because revenue increases at an increasing rate
B) Because revenue increases at a decreasing rate
C) Because the firm can sell its product at a constant price
D) Because the firm must lower its price to sell more

Question

Figure 7.2 
-Refer to Figure 7.2.Why is the total revenue curve a ray from the origin?
A) Because revenue increases at an increasing rate 
B) Because revenue increases at a decreasing rate 
C) Because the firm can sell its product at a constant price 
D) Because the firm must lower its price to sell more

Quizplus · Accepted Answer

The total revenue curve is a ray from the origin because the firm can sell its product at a constant price. This means that as the firm produces more and sells more, its revenue increases linearly, rather than at an increasing or decreasing rate. The slope of the curve represents the constant price that the firm charges for its product.

Figure 7.2 -Refer to Figure 7.2.Why Is the Total Revenue Curve a Revenue