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.
