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Why marginal revenue is equal to …

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Why marginal revenue is equal to average revenue

    • Posted by Divya Kain 7 years, 3 months ago

    CBSE > Class 12 > Economics
    • 3 answers

    Savita Rathee 7 years, 3 months ago

    Average revenue = total revenue / quantity =price*quantity / quantity = prive of a commodity but this relation only occurs in perfect competition.

    0Thank You

    Param Solanki 7 years, 3 months ago

    We know that a firm is at equilibrium when it produces such units of output that the Marginal Cost of producing the additional unit = Marginal Revenue that can be earned by its sale. However, in Perfect Competition, Price (P) = MR = AR.

    0Thank You

    Anushka Kathuria 7 years, 3 months ago

    This happens only under perfect competition where price is constant. So that revenue generated by every extra unit is equal to it's price. I.e Mr = Ar *Ar is also called price.

    0Thank You

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