What is the slope of the marginal revenue curve ?
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Answer: D. twice as steep as the demand curve
Explanation
Calculus demonstrates that for a linear demand equation, the derived marginal revenue curve has double the slope. Marginal revenue drops at twice the rate of price reductions because lower prices apply to all previous units sold. A linear demand curve equation yields a marginal revenue curve with an identical intercept but twice the slope. Monopoly pricing models rely on the relationship between demand curves and marginal revenue curves. Total revenue reaches its maximum point exactly where marginal revenue intersects the horizontal axis. Price-setting firms must calculate marginal revenue to determine profit-maximizing output quantities.
Utility companies with monopoly power use marginal revenue calculations to set electricity pricing structures. Regulatory agencies analyze firm demand and marginal revenue slopes to prevent predatory pricing practices. Microeconomic students use calculus derivatives to prove the geometric properties of monopoly revenue curves. Stating the slope is always equal to one ignores the mathematical derivation based on linear demand functions. Claiming it is half as steep gets the directional relationship backward since marginal revenue is steeper. Asserting that it shares the same slope as demand contradicts standard microeconomic calculus proofs.
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