State the relation between marginal revenue and average revenue.

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Solution

When MR < AR, AR falls

When MR = AR, AR is constant

When MR > Ar, AR rises

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Similar questions

Explain the relationship between marginal revenue and average revenue.

Define marginal revenue. State the relation between marginal revenue and average revenue when a firm :

(i) is able to sell more quantity of output at the same price.

(ii) is able to sell more quantity of output only by lowering the price.

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