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Microeconomics II
book

Microeconomics II

by D.N. Dwivedi
August 2011
Intermediate to advanced content levelIntermediate to advanced
368 pages
14h 51m
English
Pearson India
Content preview from Microeconomics II
40 Chapter 3
What is much more important in the analysis of equilibrium of a monopoly rm is the relationship
between the AR and MR curves. When price is xed, as in case of perfect competition, rm’s demand
curve takes the form of a horizontal line. In that case, AR = MR and MR is a straight line too. But, in case
of a monopoly rm, demand curve has a negative slope. erefore, its MR curve too has a negative slope.
ere is, however, a specic relationship between AR and MR, i.e., the slope of MR curve is twice that of
that AR curve. at is, given the linear demand function, marginal revenue curve is twice as steep as the
average revenue cur ...
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Publisher Resources

ISBN: 9788131797655