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N case of perfect competition, AR curve is: -

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Question

In case of perfect competition, AR curve is:

Options

  • Downward sloping

  • Positively sloped

  • Horizontal straight line

  • Vertical straight line

MCQ

Solution

Horizontal straight line

Explanation:

Price is the same or stays the same in perfect competition. As a result, total revenue grows at a steady pace, average revenue or marginal revenue remains the same or remains constant, and the AR or MR curve is parallel to the x-axis.

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