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Shapes of Total Cost Curves in the Short Run

What is the r...

Question

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

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Solution

Market price and average revenue of a price-taking firm are equal. Both are graphically indicated by a horizontal straight line because the market price is constant for a price-taking firm.

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

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Shapes of Total Cost Curves in the Short Run

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