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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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