Explain the average and marginal revenue curves of a firm under perfect
Competition
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Answer:
Average R.: Average revenu reffers to money receipt from the sale per unit output
Marginal R..: MR is a money receipt by the firm/producer from the sale of the additional output
arshdeepk2607:
its a difference between not that what i ask
please tell me if u knw that
In Prefect competition every firm sells its output at a given price, and can sell as much as it likes at this price. Hence the firm's average and marginal revenue become constant and equal. The corresponding AR and MR curve is one and the same and horizontal to the X-axis. Thus in perfect competition MR = AR (or P)
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Explanation:
Marginal revenue is the change in total revenue when one more unit of a commodity is sold.
MR= change in TR/change in quantity sold
Average revenue refers to revenue per unit of output.
AR=TR/Q
Relationship between AR and MR:
If AR is constant, MR is equal to AR. Both are indicated by the same horizontal straight line(a situation of perfect competition)
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