9) What is the behaviour of average revenue in a market in which a firm can sell any quantity of a good at a given price?

Open in App

Solution

Dear student,
The market where a firm can sell any quantity of a good at the given price is perfect competition market. In such a market the AR is constant and is equal to price. Accordingly, the Average Revenue curve is a horizontal straight line parallel to the x-axis.

Suggest Corrections

Similar questions

What is the relation between market price and average revenue of a price-taking firm?

What is the relation between market price and average revenue of a price taking firm?

Define marginal revenue. State the relation between marginal revenue and average revenue when a firm :

(i) is able to sell more quantity of output at the same price.

(ii) is able to sell more quantity of output only by lowering the price.

Quantity sold	TR	MR	AR
0 1 2 3 4 5 6

Join BYJU'S Learning Program