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Question
In which of the market structure AR > MR?
Options
perfect competition
monopoly only
both monopoly and monopolistic competition
monopolistic competition only
MCQ
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Solution
Both monopoly and monopolistic competition
Explanation:
In both monopoly and monopolistic competition, the firms face downward-sloping demand curves. To sell additional units, they must lower the price, which causes average revenue (AR) to be greater than marginal revenue (MR).
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