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When average revenue is constant, what is the state of marginal revenue? - Economics

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Question

When average revenue is constant, what is the state of marginal revenue?

Short Answer
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Solution

When Average Revenue (AR) is constant, Marginal Revenue (MR) is equal to Average Revenue.

This happens in a perfectly competitive market, where all units of a commodity are sold at the same price. As a result, each additional unit sold adds the same amount to total revenue, keeping MR = AR = Price.

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Chapter 7: Revenue Analysis - TEST QUESTIONS [Page 7.15]

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R. K. Lekhi and P. K. Dhar Economics [English] Class 12 ISC
Chapter 7 Revenue Analysis
TEST QUESTIONS | Q A. 7. | Page 7.15
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