Question 38 of 40
Q.Write a short note on Marginal Revenue.
Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2026Subjective· 3mImportance★★★★★
95% · 38/40 Questions
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Start your 14-day free trial to unlock the full solution →Marginal Revenue is the extra revenue earned from selling one additional unit; under perfect competition MR = AR = Price, while under monopoly/imperfect competition MR is less than AR and falls faster.
Marginal Revenue (MR) is the net addition to a firm's total revenue when it sells one more unit of its output.
It is calculated as:
MR = TR of n units − TR of (n−1) units
or, MR = change in Total Revenue ÷ change in quantity sold.
Key points about MR:
- Under perfect competition, price is constant for the firm, so Average Revenue (AR) = Marginal Revenue (MR) = Price; the MR curve is a horizontal straight line.
- Under imperfect competition / monopoly, the firm must lower its price to sell more, so MR is less than AR, and both slope downward; MR falls faster than AR and can become zero or negative. …
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