What changes should take place in TR will result in
• Decrease in MR
• Increase in MR
Answers
In Microeconomics or Production Economics,an increase in total revenue(TR) indicates an increase in marginal revenue(MR) as well and vise versa.
Explanation:
In Macroeconomics or Production Economics,TR refers to the total or overall revenue earned by any firm,company or business organisation by selling a certain number of output at a given period of time.Now,MR represents the additional or incremental revenue earned by a firm or company from selling additional or 1 more unit of output.It also shows the incremental or additional change in TR as the firm sells 1 more or additional unit of output.Therefore,practically,any change in TR automatically indicates proportional change in the MR.Now,note that MR is also mathematically equivalent to the market price of each unit of output as this is the price charged by the firm or company to sell each unit of output.Any increase in TR from the sale of additional unit of output reflects proportional increase in MR and vise versa.On the other hand,if TR decreases with additional sale of any output,it will be reflected through proportional decrease in the MR.