A marginal revenue curve is a graphical representation of the relationship of a firm’s marginal revenue from products sold and the quantity of the sold products. This graphical curve reflects the degree of the firm’s share hold on a particular product on the market.
For example, if the marginal revenue curve of a firm for a particular product produces a horizontal straight line, it means that the firm has no or minimal control of the product’s market and the firm needs to rely on the existing market price to sell their products.
On the other hand, if the marginal revenue curve is negatively-sloped, it means that the firm’s product has a strong market hold and can easily influence the price of the product on the market.
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