TR increases as long as MR is positive.
TR is maximum when MR = O
TR decreases as MR is negative.
| Output (in units) |
Price(in Rs.) |
TR(in Rs.) |
MR(in Rs.) |
| 0 |
12 |
0 |
- |
| 1 |
10 |
10 |
10 |
| 2 |
8 |
16 |
6 |
| 3 |
6 |
18 |
2 |
| 4 |
4.5 |
18 |
0 |
| 5 |
2 |
10 |
-8 |
If we plot the above schedule on the graph paper we obtain the TR and MR curves. The TR curve is inverse U-shaped because the monopolist can sell more by reducing the price.
So, the TR first increases with output and then it decreases. Thus, the shape of the TR curve is different under monopoly, than the one under a competitive firm
