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ECONOMICS
concept of revenue
Question | Answer |
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when AR is constant (perfect competition) what are the relations between tr and mr | •MR is the addition of TR •when price in constant MR is also constant •when MR is constant this implies TR will increase at a constant rate •MR=AR |
when AR is constant (perfect competition) what are the relations | 1)AR is declining MR is also declining 2)MR declines at a faster rate than AR 3)when MR is declining TR is increasing at a decreasing rate |
can MR be 0 or negative | YES 1)MR can be zero or negative when price id declining 2)TR stops increasing when MR IS zero.TR is maximum when MR is 0 3)TR starts declining when MR is negative 4)when MR is declining TR is increasing at a decreasing rate |
what is a firm under perfect competition | under perfect competition a firm is a price taker |
what is a firm elasticity of demand under prefect competition | its perfectly elastic Ed=∞ |