Skip to content
Exercises · Q3

Q.What is the value of the MR when the demand curve is elastic?

Telangana TsbieTextbookSubjectiveImportance★★★★★est
20% · 3/15 Questions
✓ Free question

MRMR is positive wherever demand is elastic (e>1e > 1).

There is a fixed link between marginal revenue and the price elasticity of demand. From MR=AR(1−1e)MR = AR\left(1 - \dfrac{1}{e}\right), whenever e>1e > 1 the bracket (1−1e)\left(1 - \dfrac{1}{e}\right) is positive, so MRMR is positive. Thus, over the elastic range of the demand curve, marginal revenue has a positive value (it becomes zero at unitary elasticity, e=1e = 1, and negative in the inelastic range, e<1e < 1).

Unlock everything free for 14 days

  • Full step-by-step solutions
  • Concept-first explanations
  • Methods, shortcuts & mistakes
  • PYQ mapping + timed mock tests

Full access for 14 days. No credit card required.