Why is the revenue curve negatively sloped in imperfect competition? – InterviewSolution

1.	Why is the revenue curve negatively sloped in imperfect competition?
Answer» In imperfect market competition, the seller has to reduce the price in order to sell more units. This means he tries to increase demand of his commodity by increasing its sale (by decreasing prices). So, his total revenue increases at a diminishing rate. This results in a difference between the Average Revenue (AR) and Marginal Revenue (MR). As price decreases, the Average Revenue decreases and its curve slopes downwards from left to right. Hence, the revenue curve is negatively sloped.

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