Question

Assertion: A firm is able to sell more quantity of a commodity by reducing its price.

Reason: As it sells additional units of the commodity at a lower price, the firm’s marginal revenue will be less than its average revenue.

Options

• Both Assertion and Reason are true and Reason is the correct explanation of Assertion.

• Both Assertion and Reason are true but Reason is not the correct explanation of Assertion.

• Assertion is true and Reason is false.

• Both Assertion and Reason are false.

Answer 1

Both Assertion and Reason are true but Reason is not the correct explanation of Assertion.