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Why is the marginal revenue curve below the average revenue curve under imperfect competition?
Most Upvoted Answer
Why is the marginal revenue curve below the average revenue curve unde...
For a monopoly there is a price effect. It must reduce price to sell additional output. So the marginal revenue on its additional unit sold is lower than the price, because it gets less revenue for previous units as well (it has to reduce price to the same amount for all units).
Community Answer
Why is the marginal revenue curve below the average revenue curve unde...
because if producer wants to sell more unit of output then price should be less because of competition...n cant sell at higher price because if substitute available in market..thats why AR>MR
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Why is the marginal revenue curve below the average revenue curve under imperfect competition?
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