When Demand Is Elastic,the Marginal Revenue Resulting from a Decrease

question 8

Multiple Choice

When demand is elastic,the marginal revenue resulting from a decrease in price is:

• A)positive.
• B)zero.
• C)negative.
• D)cannot be determined without more information.

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Definitions:

Competitive Industry

A market scenario where numerous producers compete to offer goods or services to consumers, ensuring no single entity dominates the market prices or supply.

Price-Quantity

Relationship between the price of a good and the quantity of the good supplied or demanded.

Linear Marginal Cost

Refers to a situation where the additional cost of producing one more unit of output is constant.

Competitive Market

A market structure characterized by a large number of firms, none of which can influence market price by acting alone.