Question

Under perfect competition:

• A. MR curve is below AR curve
• B. Price $=$ AR $=$ MR
• C. AR remains constant
• D. Both (b) and (c)

Answer 1

The correct option is D Both (b) and (c)

1) In perfect competition, average revenue is equal to the price prevailing in the market. Hence, marginal revenue= average revenue = price.

2) AR is constant as AR is equal to the price and price in the perfect competitive market remains constant. Therefore, AR remains constant.