Which of the Following Statements Is True About Marginal Revenue

question 19

Multiple Choice

Which of the following statements is true about marginal revenue?

• A)If marginal revenue is zero, it means that quantity demanded falls to zero when a firm changes its price.
• B)If marginal revenue is negative, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
• C)If marginal revenue is positive, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
• D)Marginal revenue increases as price falls and quantity sold increases.

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Definitions:

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a given time period.

Current Dollars

A term referring to the value of money not adjusted for inflation, representing the nominal value of economic transactions based on current prices.

GDP

Gross Domestic Product, a measure of the economic performance of a country, calculated as the total value of all goods and services produced.

Real GDP

Gross Domestic Product adjusted for inflation, which represents the value of all goods and services produced within a country's borders in a given period, measured in constant prices.