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InterviewSolution
| 1. |
Q.12 Why is firm’s demand curve the same as AR curve of the firm?? |
| Answer» a) When AR is decreasing, MR should be decreasing faster than AR. Thus, downward sloping MR curve is below the downward sloping AR curve(a situation of monopoly and monopolistic competition)b) If AR is constant, MR is equal to AR. Both are indicated by the same horizontal straight line(a situation of perfect competition) | |