3 Negative Marginal Revenue. The manager of your firm is puzzled because the larger the quantity of output sold, the lower its total revenue. The manager gets weekly data in a table with two columns of numbers: Quantity Sold and Total Revenue. After you do some computations and add a third and a fourth column of numbers, the manager looks at the new table and says, “Aha, now I see why selling more decreases total revenue.”
a. The third column of numbers has data on, and the fourth column has data on.
b. How do the additional columns of numbers explain the negative relationship between quantity sold and total revenue?
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