In perfect competition, average revenue curve and marginal revenue curve are same and parallel to the X-axis. Explain.

In perfect competition, average revenue curve and marginal revenue cur

1.	In perfect competition, average revenue curve and marginal revenue curve are same and parallel to the X-axis. Explain.
Answer» In perfectly competitive market, Marginal Revenue (MR) and Average Revenue (AR) are constant and equal. As a result, both of them can be shown through one line or say curve DD. Moreover, in perfect competition, market price (P) = Average Revenue (AR) = Marginal Revenue (MR) i.e. (P = AR = MR). Hence, irrespective of any price MR and AR will remain parallel to the X-axis. All points on DD curve will show Average Revenue = Marginal Revenue. Also, the Average Revenue and Marginal Revenue curve merge into one another and since value of both the revenues are same and constant the slope of curve is zero. Hence, in perfect competition, average revenue curve and marginal revenue curve are same and parallel to the X-axis.