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Question
In which one of the following types of markets are Average Revenue curve and Market Demand curve the same?
Options
Monopoly
Oligopoly
Perfect Competition
Monopolistic Competition
Solution
Perfect Competition
Explanation:
In perfect competition, the average revenue curve corresponds with the market demand curve since each firm is a price taker and sells their products at the market price, which is determined by market demand, resulting in a horizontal AR curve at this price.
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