Giving reasons, state whether the following statement are true or… - Vidyadip

Question

Giving reasons, state whether the following statement are true or false.
When marginal revenue is zero, average revenue will be constant.

✓

Answer

False.
Explanation:
When marginal revenue is zero average revenue should be diminishing. It can be explain with the help of following table:

Output	Total Revenue	Marginal Revenue	Average Revenue
1	10	0	10
2	10	0	5
3	10	0	3.3
4	10	0	2.5
5	10	0	2

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