Explain the relation between average revenue and marginal revenue when a firm can sell an additional unit or a good by lowering the price.
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Explain the relation between average revenue and marginal revenue when a firm can sell an additional unit or a good by lowering the price.
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Answers
Atul Goyal
1. AR and MR both decreases.
2. MR decrease at the rate of twice than AR.
3. MR become zero and negative but AR can never be zero.