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Production and cost — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsProduction and cost2 Marks
Question
What change in Total Revenue will result in case of:
  1. Decrease in Marginal Revenue.
  2. Increase in Marginal Revenue.
✓

Answer

  1. An increase in Total Revenue at a diminishing rate or a decrease in Total Revenue will result from decrease in Marginal Revenue. In other words, Total Revenue increases at a decreasing rate or even falls, when Marginal Revenue falls.
  2. An increase in Total Revenue at an increasing rate will result in an increase in Marginal Revenue. In other words, Marginal Revenue increases, when Total Revenue increases at an increasing rate.

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