Question

The average revenue curve of a firm under monopolistic competition is __________________.

• A. Perfectly elastic
• B. Rigidly elastic
• C. Lesser steepness than
• D. None of the above of a monopoly firm

Answer 1

Answer: (C)

Lesser steepness than

If a monopolistic competitionwants to sell a larger quantity, then it must lower the price. The average revenue curve reflects the competitive degree of market control held by a firm. For a perfectly firm with no market control, the average revenue curve is a horizontal line.

Hence, C is the correct option.