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| 1. |
Under whatmarket conditionsdoes AR always equals MR ? Explain. |
| Answer» Solution :It isunder the marketconditionwhena firmcan SELL moreat thegivenpriceand AR=MR THROUGHOUT as production is increased by thefirm . It isbecause the firm is a PRICE taker. Itmeansthatprice which is sameas AR, remainsuchanged throughout. By THEAVERAGE -marginalrelationship ,AR remainsuchanged when AR=MR throughout . | |