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Question 26 of 40

Q.In Monopoly, MR curve lies below ______ curve.

(a) AR
(b) TR
(c) AC
(d) MC
Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2024MCQ· 1mImportance★★★★★
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The correct option is (a) AR: under monopoly the MR curve lies below the AR curve.

Under monopoly (and any imperfect market) the firm faces a downward-sloping demand curve, which is its average revenue (AR) curve. To sell an extra unit the monopolist must reduce the price on all units, so the addition to total revenue — marginal revenue (MR) — is less than the price received. Consequently MR falls more steeply and the MR curve always lies below the AR curve.

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