--%>

Relation between average and marginal revenue

Describe the relation between average revenue and marginal revenue. whenever a firm can sell an extra unit or a good by lowering price.

E

Expert

Verified

(i) AR and MR both decreases.
(ii) MR decrease at the rate of twice than AR.
(ii) MR become zero and negative but AR can never be zero.

   Related Questions in Microeconomics

  • Q : Problem on annual implicit cost To

    To begin up his own business, Mitch quit his salaried job and invested $10,000 in savings which had earned him $1,000 per year in interest. He as well employs an apartment as his office that he previously had rented out for $6,500 per year. Which of the following is n

  • Q : Strikes and Lockouts Can someone please

    Can someone please help me in finding out the accurate answer from the following question. The outcomes of strikes do not comprise: (i) Losses of the perishable products. (ii) Shipping delays. (iii) Decreased production costs. (iv) Shortages.

  • Q : Organizing business to maximize the

    I have a problem in economics on organizing business to maximize the funds. Please help me in the following question. The entrepreneur who wants to maximize her firm’s admittance to funds from investors or banks must organize the business as a: (1) Proprietorshi

  • Q : Depreciation expense The Realto Theatre

    The Realto Theatre purchased a new projector costing $37,000 on January 1, 2010. Since of changing technologies, the projector is predictable to last five years after which it will be obsolete and contain a salvage value of $1,000 as a collectors item. Compute the

  • Q : Where is the price elasticity of supply

    The price elasticity of supply as in below demonstrated figure is unitary within: (w) Panel A. (x) Panel B. (y) Panel C. (z) Panel D.

    Q : Income elasticity of demand when

    When average income rises from $18,000 to $22,000 yearly and yearly gasoline consumption per household increases from 1000 to 1500 gallons, in that case the income elasticity of demand for gas is: (1) in the inferior range. (2) 0.5. (

  • Q : Problem on decrease in demand for goods

    For normal luxuries and goods, decreases in income tend to cause the: (i) Market prices to increase. (ii) Raises in quantities demanded. (iii) A reduction in demand for goods. (iv) Demand curves to shift to right. What is the right

  • Q : Securing financing for economic capital

    Can someone help me in finding out the most precise answer from the given options. Securing financing for the economic capital for a corporation can’t be accomplished by: (i) Issuing common stock. (ii) Issuing the corporate bonds. (iii) Securing the majority of

  • Q : Determine constant slope of demanded

    The slope of this illustrated figure of demand curve for DVD games is: (w) constant. (x) greater at high prices than at low prices. (y) lower at low prices than at high prices (z) unitarily elastic.

    Q : Requirement of Production Possibilities

    Deriving a production possibilities frontier needs the supposition that: (1) Resources are variable in the supply. (2) There are limitless numbers of goods. (3) Economic growth takes place at a normal rate. (4) All scarce resources are proficiently em