When Demand is perfectly elastic, Marginal Revenue is identical with price.
unit elastic
The change of total revenue per unit sold is known as marginal revenue. In a perfectly competitive firm, marginal revenue = marginal cost = price.
profit is maximized
Because for a perfectly competetive firm since the demand curve is perfectly elastic even a slightest price change doesnt add any further demand..so there is no change in marinal revenue also.Since revenue is demand multiplied with cost of unit..the two curves are same.
If the firm operates in a perfectly competitive industry, profit is maximised at the ouput level where mc=mr.
unit elastic
The change of total revenue per unit sold is known as marginal revenue. In a perfectly competitive firm, marginal revenue = marginal cost = price.
profit is maximized
Because for a perfectly competetive firm since the demand curve is perfectly elastic even a slightest price change doesnt add any further demand..so there is no change in marinal revenue also.Since revenue is demand multiplied with cost of unit..the two curves are same.
If the firm operates in a perfectly competitive industry, profit is maximised at the ouput level where mc=mr.
Demand is unit elastic.
No, in a monopolistic market, marginal revenue is less than average revenue and price. This is because the monopolist must lower the price in order to sell more units, leading to a decline in revenue per unit.
I'm thinking that marginal revenue product is the marginal revenue on one product, and marginal revenue is the marginal revenue on the whole firm sales... I'm wondering the same thing but the above response is incorrect. both terms imply values on one item as indicated by the "marginal"
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
Marginal revenue is the change in total revenue over the change in output or productivity.
A company maximizes profits when marginal revenue equals marginal costs.
Explain why the marginal revenue(MR) is always less than the average revenue (AR)?