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From course:

Economics A Level (DONEEEEEEE)

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Question:

What happens with AR and MR for a Price Taking Firm?

Author: eric_galvao



Answer:

-Since the Price will be the same no matter the Output Level, MR will equal AR as each Unit brings the Same Revenue as Before. This means TR rises as a Straight Line NOTE: This doesn’t mean that MC also Flatlines - THERE IS A MAXIMUM until MC are Higher than MR


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