Question

state with valid reasons which of the following statements are true or false?(a) average revenue curve under perfect competition is downward sloping curve.(b) when MR is falling but positive, TR will also be falling and positive​

Answer 1

a. False. As a competi­tive firm behaves as a price-taker, its AR remains the same even if volume of sales increases. P=AR=MR in perfect competition.

b. False. In the perfect competition, MR is the slope of TR. When TR rises as output rises, MR declines. When TR reaches maximum, MR becomes zero and, when TR declines, MR becomes negative.