When price reduces as output increases, AR = MR. - Vidyadip

Question

When price reduces as output increases, AR = MR.

✓

Answer

False. When price (= average revenue) reduces as output increases, MR declines faster than AR. So that AR > MR.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "True/False" from MICROECONOMICS CH : 9 CONCEPT OF REVENUE→MICROECONOMICS CH : 9 CONCEPT OF REVENUE — all question types→Economics STD 11 Commerce question papers→CBSE Board STD 11 Commerce question papers→CBSE Board question paper generator→

Similar questions

An individual can shift from the consumption of a normal good to the consumption of an inferior good.

Increase in demand refers to extension of demand.

In a state of perfect competition, commodity price should not exceed MC in case profits are to be maximised.

Giving reasons, state whether the following statements are true or false.
In case of indifference curve consumer is in equilibrium if $\text{MRS}_\text{xy}=\frac{\text{P}_\text{x}}{\text{P}_\text{y}}$.

In case of Giffen goods, income effect is higher than the substitution effect.

Consumer equilibrium can be determined only if the law of diminishing marginal utility holds good.

Giving reasons, state whether the following statements are true or false:
When supply decreases more than proportionately than the fall in demand, equilibrium price will also fall.

In case of excess demand, equilibrium price must rise.

Giving reasons, state whether the following statements are true or false.
When demand curve is Rectangular hyperbola, ED > 1.

Greater the alternative uses of a commodity, lesser is the elasticity of demand.