Question

Choose the correct statement.

A. Marginal revenue equals total revenue divided by quantity sold.

B. For a​ monopoly, marginal revenue equals price.

C. For a​ monopoly, total revenue equals marginal revenue multiplied by the quantity sold.

D. When price is lowered to sell one more​ unit, the lower price results in a revenue loss and the increased quantity sold results in a revenue gain.

Answer 1

D) When price is lowered to sell one more​ unit, the lower price results in a revenue loss and the increased quantity sold results in a revenue gain.

• When you offer a sales discount, you are losing revenue since marginal revenue is lower than price, but at the same time if the marginal revenue is ≥ to marginal cost, then your profit and total revenue is increasing.

Step-by-step explanation:

the other statements are false because:

1. A. Marginal revenue equals total revenue divided by quantity sold. FALSE, MARGINAL REVENUE IS THE REVENUE GENERATED BY SELLING ONE ADDITIONAL UNIT.
2. B. For a​ monopoly, marginal revenue equals price. FALSE, FOR A MONOPOLY MARGINAL REVENUE IS LOWER THAN PRICE.
3. C. For a​ monopoly, total revenue equals marginal revenue multiplied by the quantity sold. FALSE, TOTAL REVENUE = PRICE X QUANTITY SOLD