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Under imperfect competition, whether it may take the form of monopoly, duopoly or oligopoly, the demand curve facing the firm is negatively inclined or we can say its slopes downward from left to right. This means that a firm can affect the market price and can sell more goods at lower prices and less at a higher price.

Under imperfect competition, the behavior of MR curve is that it lies below the AR curve. As production expands, the distance between the two curves increases. The AR line and the price line is the same as is clear from the schedule given below:



It is clear from the above figure (14.4), that the average revenue curve and marginal revenue curve both have a negative slope. MR curve lies below the AR curve because the output is solid at the falling prices.