Relationship between Average Revenue, Marginal Revenue, and Elasticity of Demand1 min read


Learning Objectives

  • Relationship between AR, MR, and Elasticity of Demand
    • Graphical Derivation
    • Derivation through Calculus

When, Elasticity (e) = -1, MR = 0 Elasticity (e) < -1, MR >0 Elasticity (e) > -1, MR<0 Note: Elasticity of demand always lies between (-∞,0).

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