A firm whose product has a downward-sloping straight line demand curve is operating at an output level at which its marginal revenue is positive. Which strategy would be most effective if the owners of the firm want to maximise the firm’s total revenue?
- Adecrease the firm’s output to where marginal revenue equals average revenue
- Bdecrease the product’s price to where average revenue is zero
- Cincrease the firm’s output to where marginal revenue is zero
- Dincrease the product’s price to where marginal revenue equals average revenue