When TR is increasing as a monopolist's output increases
A) MR is negative.
B) MR is positive.
C) MR = 0.
D) MR may be positive or negative.

Question

Quizplus · Accepted Answer

The relationship between TR and MR is such that when TR is increasing, MR is positive. This is because in a monopolistic market, the monopolist can increase their revenue by producing and selling more goods at a higher price than their marginal cost. As such, when the monopolist produces more output, it leads to an increase in total revenue (TR). However, the MR curve for a monopolist lies below the demand curve, meaning that the monopolist must lower the price of their product to sell more. This results in a positive but decreasing MR curve. Therefore, as TR increases, MR is positive.

When TR Is Increasing as a Monopolist's Output Increases