GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In Imperfect competition total revenue rises at ____ upto an output level and then ____
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An increasing rate, rises
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An increasing rate, falls
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A decreasing rate, rises
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A decreasing rate, falls
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Explanation:
Detailed explanation-1: -This means that when total revenue increases, marginal revenue is positive. When it falls, you end up with a negative marginal revenue.
Detailed explanation-2: -Marginal revenue refers to the change in total revenue with an increase in production of one more unit. If total revenue increases at a diminishing (decreasing) rate then, marginal revenue decreases. It is because marginal revenue shows the changes in total revenue.
Detailed explanation-3: -Answers. (i) An increase in Total Revenue at a diminishing rate or a decrease in Total Revenue will result from decrease in Marginal Revenue. In other words, Total Revenue increases at a decreasing’ rate or even falls, when Marginal Revenue falls.
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