The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7

-Under perfect competition, the average revenue curve of the firm coincides with its average cost curve.

Question

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7
 
-Under perfect competition, the average revenue curve of the firm coincides with its average cost curve.

Quizplus · Accepted Answer

Under perfect competition, the average revenue curve of the firm coincides with its marginal revenue curve, not its average cost curve. The average cost curve can intersect with these revenue curves at different points, determining profit maximization or loss minimization scenarios.

The Figure Given Below Shows the Aggregate Demand and Supply