Explain the relation between MR and AR when a firm is able to sell more quantity of output. (i) at the same price(ii) Only by lowering the price.

Explain the relation between MR and AR when a firm is able to sell mor

1.	Explain the relation between MR and AR when a firm is able to sell more quantity of output. (i) at the same price(ii) Only by lowering the price.
Answer» Solution :(i) MR = AR when the firm is able to sell more quantity at the given price. Both the curves are horizontal lines parallel to the X-axix and co-incide ONE another. (II) Both the curves will slope downwards and the MR curve will be more steeper than the AR curve or the MR curve will lie below the AR curve.