Marginal Revenue Below Average Total Cost
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Marginal Revenue Below Average Total Cost

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    Karam A.
    PL
    Karam A.

    here i want to explain the reason ,,Why is marginal revenue below average revenue for a monopolist? A mathematical connection between average revenue and marginal revenue stating that the change in the average revenue depends on a comparison between average revenue and marginal revenue. For perfect competition, with no market control, marginal revenue is equal to average revenue, and average revenue does not change. For monopoly and other firms with market control, marginal revenue is less than average revenue, and average revenue falls. The relation between average revenue and marginal revenue',500,400)">marginal revenue is one of several that reflect the general relation between a marginal and the corresponding average. The general relation is this: If the marginal is less than the average, then the average declines. If the marginal is greater than the average, then the average rises. If the marginal is equal to the average, then the average does not change. This general relation surfaces throughout the study of economics. It also applies to average and marginal product, average and marginal cost, average and marginal factor cost, average and marginal propensity to consume, and well, any other average and marginal encountered in economics.

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