Question

Explain the relationship between total revenue and marginal revenue when producer is able to sell more only by reducing the price of its output.​

Answer 1

Answer:

In economics, the total revenue test is a means for determining whether demand is elastic or inelastic. If an increase in price causes an increase in total revenue, then demand can be said to be inelastic, since the increase in price does not have a large impact on quantity demanded.

Explanation:

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