What is the relationship between AR curves and MR curves?

MR curve lies above the AR curve

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AR curve lies below the MR curve

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AR curve equals the MR curve

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MR curve lies below the AR curve

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Solution

The correct option is D
MR curve lies below the AR curve

Marginal revenue (MR) curve lies below the average revenue (AR) curve, it means MR falls more sharply than AR. For, the MR is concerned only with one unit while the AR is concerned with all the units.

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