DragIT - Revenue curves (2)
A change in the firm's output represents a movement along the demand curve (AR) and a movement along the TR curve. A shift in the demand curve would cause the total revenue curve to shift too.
The diagram below shows the current demand curve and marginal revenue curve (AR1and MR1 respectively) for product Z. Demand for this product falls by two units at all prices.
(a) Click on the points where the demand curve crosses the two axes in order to construct the new demand curve.
(b) Now click on the two points where the MR curve crosses the two axes in order to construct the new MR curve.
You may like to check your answer.