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    chris89 Posts: 10, Reputation: 3
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    #1

    Oct 18, 2007, 01:02 AM
    MR and AR curves, betyou cant answer this
    In an imperfect competitors Costs/Revenue Curve, how can the AR and MR curve at Quantity = 0, i.e. before production has even started, be non zero?? i.e. MR (the cost of production of this last unit of good) is NOT zero? And the average revenue is NON zero also, even though AR = TR / Q, which are BOTH zero at zero output?

    why?
    possible explanations I thought of: *Quantity starts at 1, as I know AR = MR at quantity =1.
    *The quantity axis can be seen to be so finely divided that the first quantity is theoretically infinitely close (infinite output) to the zero line that it's a fair assumption to just extend the revnue lines to Q = 0.

    ?
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