Question

relationship between TR and MR (when price remain constant )

Answer 1

Relationship between TR and MR (When Price remains Constant):

When price remains constant, firms can sell any quantity of output at the price fixed by the market. As a result, MR curve (and AR curve) is a horizontal straight line parallel to the X-axis. Since MR remains constant, TR also increases at a constant rate .Due to this reason, the TR curve is a positively sloped straight line (see Fig. 7.2). As TR is zero at zero level of output, the TR curve starts from the origin.