GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Marginal revenue is at the quantity that generates maximum total revenue and negative beyond that point.
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-1
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Zero
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+1
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+2
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Explanation:
Detailed explanation-1: -(iii) Marginal revenue can be zero or negative but average revenue can never be negative.
Detailed explanation-2: -When marginal revenue is zero, total revenue is Maximum. The profit maximizing quantity and price can be determined by setting marginal revenue equal to zero, which occurs at the maximal level of output. Marginal revenue equals zero when the total revenue curve has reached its maximum value.
Detailed explanation-3: -Answer and Explanation: Marginal revenue can be zero and can be negative as well, for a firm with some market power.
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