Can average revenue be zero?
Dear Student,
Average revenue is the per unit of revenue received from the sale if the commodity or its the income received from the sale of the given quantity of output. Average revenue also equals to price.
Well, Average revenue can never be zero in any of the markets that are perfect competition, monopoly and monopolistic competition. In perfect competition market, Average revenue curve is a straight line parallel to the x-axis. In monopoly competition Average revenue curve is slop downwards from left to right, it reduces with increase in a sale but can never be zero or negative and always remains positive. In monopolistic competition, Average revenue curve is downward sloping but can never be zero.
Marginal revenue curve can be zero as well as negative but average revenue curve cannot be zero in any of the markets.
Regards,
Average revenue is the per unit of revenue received from the sale if the commodity or its the income received from the sale of the given quantity of output. Average revenue also equals to price.
Well, Average revenue can never be zero in any of the markets that are perfect competition, monopoly and monopolistic competition. In perfect competition market, Average revenue curve is a straight line parallel to the x-axis. In monopoly competition Average revenue curve is slop downwards from left to right, it reduces with increase in a sale but can never be zero or negative and always remains positive. In monopolistic competition, Average revenue curve is downward sloping but can never be zero.
Marginal revenue curve can be zero as well as negative but average revenue curve cannot be zero in any of the markets.
Regards,