CBSE Class 12-commerce Answered
Explain that the marginal revenue curve is negative when
total revenue is declining under monopoly market structure.
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
Expert Answer
Only when price is declining, marginal revenue can be negative for a monopoly firm. Total revenue will not increase beyond 30 at 6th unit when MR is equal to 0. So, TR is maximised when MR is equal to 0. TR declines when MR is negative. When MR is declining, very less is added to TR for every additional unit sold in the market. Thus, TR increases only at a diminishing rate.
|
Q |
P |
TR |
AR |
MR |
|
1 |
10 |
10 |
10 |
10 |
|
2 |
9 |
18 |
9 |
8 |
|
3 |
8 |
24 |
8 |
6 |
|
4 |
7 |
28 |
7 |
4 |
|
5 |
6 |
30 |
6 |
2 |
|
6 |
5 |
30 |
5 |
0 |
|
7 |
4 |
28 |
4 |
-2 |
Answered by | 26 Apr, 2016, 09:47: AM
CBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERTCBSE 12-commerce - Microeconomics
Asked by Topperlearning User | 26 Apr, 2016, 07:47: AM
ANSWERED BY EXPERT
