This happens in the initial stage of output when the marginal revenue is above zero.
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Question
What happens to total revenue when the marginal revenue is positive?
Short Answer
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Solution
When marginal revenue (MR) is positive, total revenue (TR) increases as output increases. This means that for each additional unit sold, the firm is still earning extra income, so the total earnings from sales continue to rise.
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Chapter 8: Cost and Revenue Analysis - TEST YOURSELF QUESTIONS [Page 161]
