(a) A decrease in marginal revenue – When MR is declining, less is added to TR for every additional unit sold. Accordingly, TR increases only at a diminishing rate. TR stops increasing when MR = 0 so that TR is maximum when MR = 0.
(b) An increase in marginal revenue – In case AR is constant (as under perfect competition), MR is also constant, implying that TR increases at a constant rate. Accordingly, TR forms a straight line sloping upward and starting from the origin.
