The firm holds a patent and is technologically progressive

The correct answer to the given question is option B. Marginal revenue is greater than average revenue.

• For a firm which holds a patent and is technologically, the fixed cost incurred in developing a patent and investing in technology is very high.
• However, the variable costs are relatively low and hence the incremental costs incurred in producing every additional unit of product is low.
• Thus, as the number of units being produced increases the fixed cost incurred per unit also decreases thereby increasing the average revenue per unit.
• However, the marginal revenue tends to be greater than the average revenue per unit as the incremental costs for every additional unit is very low.