Q308
Under which market structure, average revenue of a firm is equal to its marginal revenue
A.
Oligopoly
B.
Monopoly
C.
Perfect competition
AnswerD.
Monopolistic competition
Answer: Option C
Solution
Answer: Option C
Solution:
Under Perfect competition market structure, average revenue of a firm is equal to its marginal revenue. For a perfectly competitive firm, average revenue is not only equal to price, but more importantly, it is equal to marginal revenue, all of which are constant.