Marginal revenue is positive when the price elasticity of demand is greater than 1.

Question

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Marginal revenue is positive when the price elasticity of demand is greater than 1 because an increase in price will cause a proportionally larger decrease in quantity demanded, which leads to an increase in total revenue despite a decrease in the quantity sold. This is known as an elastic demand curve. When price elasticity of demand is less than 1, the demand curve is inelastic, and an increase in price results in a decrease in total revenue.

Marginal Revenue Is Positive When the Price Elasticity of Demand