Answer :

Under imperfect competition, Average Revenue (AR) remains __above__

Marginal Revenue (MR).


Marginal revenue is the addition to total revenue by selling one more unit of the commodity. Average revenue is the revenue per unit of the commodity sold. Unlike under perfect competition, a firm under imperfect competition such as under monopoly can sell more only by lowering its price. Therefore, the average revenue curve is downward sloping and its corresponding marginal revenue curve lies below it.


OR


‘‘For a firm to be in equilibrium, Marginal Revenue (MR) and Marginal Cost (MC) must be equal and beyond that level of output Marginal


Cost must be higher.’’


Conditions for a firm to be in equilibrium:


- Marginal cost should be equal to marginal revenue.


- Its profit should be maximum.


Rate this question :

How useful is this solution?
We strive to provide quality solutions. Please rate us to serve you better.
Try our Mini CourseMaster Important Topics in 7 DaysLearn from IITians, NITians, Doctors & Academic Experts
Dedicated counsellor for each student
24X7 Doubt Resolution
Daily Report Card
Detailed Performance Evaluation
caricature
view all courses
RELATED QUESTIONS :

(a) Define price Economics - Board Papers

If the market supEconomics - Board Papers

Will a profit-maxNCERT - Introductory Microeconomics

How does an increNCERT - Introductory Microeconomics