Question

Assertion (A): Under imperfect competition total revenue is at its maximum point when marginal revenue is zero.

Reason (R): Marginal revenue is always less than average revenue under imperfect competition.

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

Explanation:

Both statements are true. TR is maximum when its slope, MR, is zero; MR being less than AR under imperfect competition does not explain this condition.