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What is the marginal revenue curve for a competitive firm? Explain.

What is the marginal revenue curve for a competitive firm? Explain.

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Answer #1

Hello Sir/ Mam

A perfectly competitive firm survives in an environment where the price is not in control of any individual firm and hence, firms are price takers and hence, they have a horizontal demand curve.

Hence, due to this reason, its' Marginal Revenue Curve is also horizontal as there is no price control in hands of firm and for the same reason, it also coincides with average revenue curve of the firm.

Hence, the MARGINAL REVENUE CURVE :

MR curve is same as AR curve in the perfectly competitive environment.

I hope this solves your doubt.

Do give a thumbs up if you find this helpful.

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