If the demand curve for a firm is a straight line with negative slope, which of the following is the shortcut to finding the MR?
A) The demand curve starts below the marginal revenue curve and cuts the marginal revenue curve halfway down its length.
B) The marginal revenue curve starts at the same point as the demand curve and has twice the slope of the demand curve.
C) The marginal revenue curve is parallel to the demand curve with the same slope.
D) The marginal revenue curve starts at the same point as the demand curve and has a slope of 0.

Question

Quizplus · Accepted Answer

For a firm with a linear demand curve with negative slope, the shortcut to finding the MR curve is that it starts at the same point as the demand curve and has twice the slope of the demand curve. This is because the MR curve for a linear demand curve is also a straight line that intersects the quantity axis at half the quantity demanded where the demand curve intersects the price axis. Therefore, the correct option is (B).

If the Demand Curve for a Firm Is a Straight