MCQ
In monopolistic competition, which relationship is true from the following between $AR$ and $MR?$
- A$AR = MR.$
- B$AR < MR.$
- ✓$AR > MR.$
- DNone of these.
Both $AR$ and $MR$ curves are downward sloping under monopolistic competition because a firm can sell more commodity by lowering the price. The $MR$ curve is half of $AR$ curve, i.e. $AR > MR.$
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