When Marginal Revenue Is Positive for a Linear (Inverse) Demand

question 166

Multiple Choice

When marginal revenue is positive for a linear (inverse) demand function, decreases in output will cause total revenues to

• A)increase.
• B)decrease.
• C)remain unchanged.
• D)there is not sufficient information to classify the elasticity of demand.

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Definitions:

Operating Income

Income generated from a company's primary business activities, excluding deductions for interest and taxes.

Cash Sales

Revenue generated from transactions where payment is made in cash immediately upon purchase.

Supplies Expense

Supplies Expense represents the cost consumed in the use of supplies, such as office supplies, during a reporting period.

Rent Expense

the cost incurred by a company to utilize property or equipment for business operations, typically recognized over the lease term.