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Marginal revenue curve

R

Rupel

Member
Hi, can someone please explain why the Marginal revenue curve is steeper if demand is less elastic. Kindly reply.
 
The less elastic the demand curve, the steeper it is, as a large change in price leads to a small change in quantity.

If the demand curve is a downward-sloping straight line, then the corresponding MR curve starts form the same intersect on the price axis and is exactly twice as steep as the demand curve. Hence, a steeper demand curve, implies a steeper MR curve.
 
Whippet1 said:
The less elastic the demand curve, the steeper it is, as a large change in price leads to a small change in quantity.

If the demand curve is a downward-sloping straight line, then the corresponding MR curve starts form the same intersect on the price axis and is exactly twice as steep as the demand curve. Hence, a steeper demand curve, implies a steeper MR curve.
Click to expand...
Thank you very much for explaining.
 
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