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The calculus-free answerThink of the effect incremental increases in quantity have on total revenue. Make a simple graph with a demand curve and draw boxes representing total revenue. Notice how the total area of the box (representing the total revenue) varies as quantity increases. With a linear demand curve, as you move down the curve the box becomes larger and larger in area until you reach the curve's midpoint. This means that the MR up to this point was positive because TR was increasing. After this point the area of the box declines, this means that from this point forward the MR is negative because TR is decreasing. This is why the MR curve hits zero at half the quantity the demand curve hits zero. Hope this helps.

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Because in Pure Competition, Demand equals Price, and Price equals Marginal Revenue;hence, Demand equals Marginal revenue.

When Demand is perfectly elastic, Marginal Revenue is identical with price.

marginal revenue always lies behind the demand curve,and when demand increases marginal revenue also increases.demand curve is used to determine price of a commodity.

Price elasticity of demand is a way to determine marginal revenue. Optimal revenue and, more importantly, optimal profit will occur to the point when marginal revenue = marginal cost, or the price elasticity of demand < 1.

marginal revenue is negative where demand is inelastic

Demand.

This question reflects a fundamental misunderstanding of supply and demand. Marginal revenue and average revenue are related to a firm's cost function, and are thus connected to SUPPLY. They have nothing to do with a demand curve in classical economics, which is the marginal benefit to the CONSUMER of being in the market.

Marginal Revenue = Marginal Cost; mark-up price to the demand curve.

Profit-maximizing price is found at the quantity where MR=MC, marginal revenue=marginal cost. You will have to graph both marginal revenue and marginal cost and find the point of intersection. That is the profit-max quantity, but then you will have to find its corresponding price. In perfect competition, price=marginal revenue, which is constant, but in an imperfect economy, you will have to find the demand at the profit-max quantity and find the corresponding price from the demand curve.

When a firm makes a profit by producing enough goods to meet demand without having leftover supply the point of profit is where marginal revenue equals marginal cost.

Since Marginal revenue refers to the additional revenue earned by a monopolist by increasing the sale by 1 unit ( usually through lowering the price ), the additional revenue earned will always be less since there has been a drop in price.

Profit maximization occurs when the firm produces /sets their price at the intersection of the marginal cost curve and the horizontal MR DARP curve (marginal revenue, demand, average revenue, price)

Profit maximization occurs when the firm produces /sets their price at the intersection of the marginal cost curve and the horizontal MR DARP curve (marginal revenue, demand, average revenue, price)

because price and output are related by the demand function in a monopoly. it is the same thing to choose optimal price or to choose the optimal output. even though the monopolist is assumed to set price and consumers choose quantity as a function of price, we can think of the monopolist as choosing the optimal quantity it wants consumers to buy and then setting the corresponding price. OR in simpler terms Because AR (demand) is downward sloping - (see equi-marginal rule or Law of Equi-Marginal Utility). To sell one more unit of output, the firm must lower its price, meaning that the revenue received is less than that received for the previous unit (marginal revenue received for unit 2 is less than that for unit 1). Therefor the marginal revenue will be less than the average revenue. Unit 1 sold for $5 Marginal revenue=$5 Average Revenue=$5 Unit 2 sold for $4 Marginal revenue=$4 Average Revenue=$4.50 ($5+$4/2)

The point where marginal revenue equals marginal cost

AnswerFor a perfectly competitive firm with no market control, the marginal revenue curve is a horizontal line. Because a perfectly competitive firm is a price taker and faces a horizontal demand curve, its marginal revenue curve is also horizontal and coincides with its average revenue (and demand) curve. Yes - what you must remember is that a firm's demand curve in perfect competition is its average revenue curve. Average revenue = price x quantity / quantity = price. The demand curve shows the quantity demanded at varying prices and this is exactly what the average revenue curve will do.Because there are so many sellers in the market, no one firm has enough market power to influence price (if a firm tried to raise price consumers would move to different suppliers; nobody would buy the good), therefore price is determined by industry supply and demand, and a firm can produce any quantity at this price . This means that the firm faces a horizontal average revenue (demand curve) and if average revenue is constant, this means total revenue is increasing at a constant rate, and therefore marginal revenue is constant as well.

The pure monopolist's market situation differs from that of a competitive firm in that the monopolist's demand curve is downsloping, causing the marginal-revenue curve to lie below the demand curve. Like the competitive seller, the pure monopolist will maximize profit by equating marginal revenue and marginal cost. Barriers to entry may permit a monopolist to acquire economic profit even in the long run.

Firms in most cases opt to select prices in the elastic regions of their demand curve. This fact explains why marginal revenue curve is always below.

It's when the MR is not equal to MC. The firm in this case is unable to produce output the equals marginal revenue to marginal cost.

Marginal utility is the key concept underline demand .The height of a demand curve reflects marginal utility.The marginal utility curve resembles the demand curve. So, it is through the marginal utility we get the demand curve.

Marginal Revenue is the derivate (rate of change) of total revenue. Total revenue is = Price x Quantity. For instance, if the demand curve was Q = 100 - P, find the inverse demand (P = 100 - Q). Total Revenue = 100Q-Q^2Therefore marginal revenue is the derivative of 100Q - Q^2.MR = 100 - 2Q (thus twice the negative slope).In short: inverse demand x Q, find the derivative.Source(s):Microeconomic Theory Class

Demand is unit elastic.

Because for a perfectly competetive firm since the demand curve is perfectly elastic even a slightest price change doesnt add any further demand..so there is no change in marinal revenue also.Since revenue is demand multiplied with cost of unit..the two curves are same.

The marginal revenue curve describes the incremental change in revenue (that is, price*units sold). The MR is not always equivalent to its demand curve. The more perfect competition is, the closer demand approaches the MR. This is because, in perfect competition, firms sell at the MC = MR = P criterion. In the opposite case, monopoly, MR always lies under of demand, and firms achieve monopoly profits by choosing a production quantity where MC = MR and charging a price mark-up.

Some of the business applications are: (1) Finding the number of ouputs produced to maximize the profit. (2) Calculation of marginal revenue , marginal cost (3) Calculation of marginal average cost (4) Calculating elasticity of demand