Question

Q 11) Under monopoly MR can be negative only when : *

AR is increasing

AR is decreasing

AR is constantly

AR = 0

​

Answer 1

AR is decreasing

is the the Answer

Answer 2

Under monopoly MR can be negative only when AR is decreasing

• Marginal revenue can also become negative, from one production stage to the next, total revenue decreases.
• The monopolist typically generates an effective rate at which marginal income equals marginal cost, like a competing business. In the specific case of MR being negative, the AR is decreasing as well as the TR.
• MR or marginal revenue can be negative when TR or the total revenue falls with a gradual rise in the total output.