Question

Under imperfect competition, what happens to MR when TR is positive?

पर्याय

• Decreases

• Increases

• remains constant

• May increase or decrease

Answer 1

Decreases

Explanation:

Because the demand curve slopes downward in an imperfectly competitive market, a firm must lower its price in order to sell more units. Therefore:

• It's still possible for Total Revenue (TR) to be positive.
• However, for every extra unit sold, the Marginal Revenue (MR) falls.
• While TR stays positive, MR may even go to zero or negative.