In: Economics
a. Explain how marginal revenue curves are derived from total revenue curves.
b. Explain why marginal revenue curves might slope downwards.
c. Explain why marginal revenue curves might be horizontal.
b. The downward sloping of marginal revenue curve implies that price a monopolist expects to receive will not remain constant while it increases its out put.
c. The marginal revenue curve for a perfectly competitive firm is horizontal due to the fact that it faces perfectly elastic demand at the market determined price.