what happens to Average revenue when marginal revenue is less than average revenue
Dear student
Marginal revenue is the additional revenue generated from the sale of an additional unit of output. It is the change in Total revenue from sale of one unit of a commodity or a good.
When MR or marginal revenue is less than average revenue (AR) then it means that revenue from every additional unit of output will be less than AR. Therefore AR and MR curve falls with MR below AR.
Regards
Marginal revenue is the additional revenue generated from the sale of an additional unit of output. It is the change in Total revenue from sale of one unit of a commodity or a good.
When MR or marginal revenue is less than average revenue (AR) then it means that revenue from every additional unit of output will be less than AR. Therefore AR and MR curve falls with MR below AR.
Regards