Question

At what rate $TR$ of the firm will increase if it is facing a perfectly elastic demand curve, and price of the product happens to be $Rs.10$ per unit. Give logical reasoning.

Answer 1

$MR$ is the rate of change in $TR$
When demand is perfectly elastic
$AR=MR=Price$
$MR=Rs.10$
Implying that $TR$ will increase by $Rs.10$ for every additional unit of output.
$TR$ will increase by $Rs.10$.