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| 1. |
What is revenue ? Explain the relation between marginal revenue and average revenue. |
| Answer» Solution :Revenue is total receipts generated from selling a particular number of units of a good by a firm. Relationship between MR and AR : (i) When MR is greater than AR then AR INCREASES. (ii) When MR is equal to AR then both the curves coincide with each other and are parallel to x-axis. (iii) When MR is LESS than AR, AR DECREASES. | |