In perfect competition, the average revenue curve of a firm is
A.
below the marginal revenue curve
B.
downward sloping
C.
the marginal revenue curve
D.
convex to the origin
Correct Answer: Option C
Explanation
For a perfectly competitive firm, the average revenue curve is a horizontal, or perfectly elastic, line. It is the same as a marginal revenue curve which is also a horizontal line at the market price, implying perfectly elastic demand.
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