Question

WHAT HAPPENS IF AR IS NOT CONSTANT?

Answer 1

If AR is not constant then it will not equal to the MR as well as it will also affect the perfect conditions of MR.

Answer 2

MR can be negative when TR falls with rise in output. However, MR cannot be zero or negative when price remains constant at all levels of output. When price remains same at all output levels, then TR increases at a constantrate (due to constant MR).


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