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When Q increase from 1 to 2 TR increase from 10+18=28. MR = 18−10=8. Noticed that Q is increase, Price = AR is falls and MR falls

Economics

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  1. Verify the Marginal Revenue (MR) calculation.

    Marginal Revenue (MR) is the change in total revenue (ΔTR\Delta TR) divided by the change in quantity (ΔQ\Delta Q).
    Given:
    When QQ increases from 1 to 2, TRTR increases from 10 to 18.

    ΔTR=TR2−TR1=18−10=8\Delta TR = TR_2 - TR_1 = 18 - 10 = 8 ΔQ=Q2−Q1=2−1=1\Delta Q = Q_2 - Q_1 = 2 - 1 = 1 MR=ΔTRΔQ=81=8MR = \frac{\Delta TR}{\Delta Q} = \frac{8}{1} = 8

    Your calculation MR=18−10=8MR = 18 - 10 = 8 is correct.

  2. Verify the observation about Price, Average Revenue (AR), and Marginal Revenue (MR).

    In markets where a firm has some market power (e.g., monopoly, monopolistic competition), to sell more quantity (QQ increases), the firm must lower its price. Since Average Revenue (AR) is equal to Price (AR=TRQ=PAR = \frac{TR}{Q} = P), if the price falls, then AR also falls. When AR is falling, MR will always be less than AR and will also be falling. This is a fundamental relationship in such market structures.
    Your observation that "when QQ increases, Price = AR falls and MR falls" is correct.

    ✅ Correct. All your calculations and observations are accurate based on the principles of marginal revenue and average revenue.

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