Question

Which one of the following statements is true about Marginal Revenue?

Options

• It is always constant for all firms.

• It is always equal to the average revenue.

• It is the revenue gained from decreasing output by 1 unit.

• MR at x = a is the additional revenue obtained by increasing the output from a to a + 1.

Answer 1

MR at x = a is the additional revenue obtained by increasing the output from a to a + 1.

Explanation:

Marginal Revenue (MR) is defined as the additional revenue earned by a firm when it. sells one more unit of a product. Therefore, M R at x = a represents the revenue gained by increasing output from a to a + 1.