{"id":56147,"date":"2024-04-16T00:39:37","date_gmt":"2024-04-16T00:39:37","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=56147"},"modified":"2024-04-16T00:39:37","modified_gmt":"2024-04-16T00:39:37","slug":"on-a-less-than-perfectly-elastic-demand-curve-the-mr-for-a-given-price-and-output-is-equal-to-price-multiplied-by","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/on-a-less-than-perfectly-elastic-demand-curve-the-mr-for-a-given-price-and-output-is-equal-to-price-multiplied-by\/","title":{"rendered":"On a less than perfectly elastic demand curve, the MR for a given price and output is equal to price multiplied by"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a977bbf52b2f\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    &#8221;$$left[                <\/div>\r\n                                                                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    $$&#8221; option2=&#8221;$$\\left[ {e &#8211; \\frac{1}{e}} \\right]$$&#8221; option3=&#8221;$$\\left[ {1 &#8211; \\frac{1}{e}} \\right]$$&#8221; option4=&#8221;$$\\left[ {\\frac{1}{e} &#8211; 1} \\right]$$&#8221; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is $\\boxed{\\left[ {1 &#8211; \\frac{1}{e}} \\right]}$.<\/p>\n<p>Marginal revenue (MR) is the additional revenue that a firm earns from selling an additional unit of output. It is calculated by taking the derivative of total revenue (TR) with respect to output.<\/p>\n<p>Total revenue is equal to price times quantity sold, <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> so MR is equal to price times the derivative of quantity sold with respect to price. The derivative of quantity sold with respect to price is negative, because as price increases, quantity demanded decreases.<\/p>\n<p>The elasticity of demand is a measure of how responsive quantity demanded is to changes in price. It is calculated by taking the percentage change in quantity demanded divided by the percentage change in price.<\/p>\n<p>A less than perfectly elastic demand curve is one where the elasticity of demand is less than 1. This means that quantity demanded is not very responsive to changes in price.<\/p>\n<p>When the elasticity of demand is less than 1, MR <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> is less than price. This is because the decrease in revenue from selling fewer units outweighs the increase in revenue from charging a higher price.<\/p>\n<p>The formula for MR is:<\/p>\n<p>$$MR = P \\left[ 1 &#8211; \\frac{1}{e} \\right]$$<\/p>\n<p>where $P$ is price and $e$ is the elasticity of demand.<\/p>\n<p>Therefore, the correct answer is $\\boxed{\\left[ {1 &#8211; \\frac{1}{e}} \\right]}$.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>$$&#8221; option2=&#8221;$$\\left[ {e &#8211; \\frac{1}{e}} \\right]$$&#8221; option3=&#8221;$$\\left[ {1 Subscribe on YouTube &#8211; \\frac{1}{e}} \\right]$$&#8221; option4=&#8221;$$\\left[ {\\frac{1}{e} &#8211; 1} \\right]$$&#8221; correct=&#8221;option3&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>On a less than perfectly elastic demand curve, the MR for a given price and output is equal to price multiplied by<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/on-a-less-than-perfectly-elastic-demand-curve-the-mr-for-a-given-price-and-output-is-equal-to-price-multiplied-by\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"On a less than perfectly elastic demand curve, the MR for a given price and output is equal to price multiplied by\" \/>\n<meta property=\"og:description\" content=\"$$&#8221; 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