Which of the following is true of a firm facing a downward s

Which of the following is true of a firm facing a downward sloping demand curve? The marginal revenue from each unit sold is constant. The firm faces a constant marginal cost curve. A price cut will reduce total revenue. In order to sell more units, the firm needs to lower its price. The firm\'s total revenue and price are directly correlated.

Solution

Option 4

Since a downward sloping demand curve represents the elastic nature of demand, an increase in price would make people to buy less. Similarly with the reduction in price it would encourage people to buy more which increase total revenue.