What is the correct answer?


In case of monopoly, TR curve rises at a:

A. Constant rate

B. Decreasing rate

C. Increasing rate

D. None of the above

Correct Answer :

B. Decreasing rate

In monopoly, TR curve increases at decreasing rate because monopolist or a producer under monopolistic competition can sell more of the commodity only by lowering its price and hence facing downward sloping AR(demand curve). So as sale increases, price or AR tends to reduce. If AR is reducing then MR must also reduce, hence it follows that TR under monopoly increases at a decreasing rate. So TR has no longer constant slope here.}

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