Question 24
Market StructuresThe diagram above shows a firm operating under conditions of monopolistic competition. The curve W represents its
- A.marginal revenue
- B.marginal cost
- C.average cost
- D.average revenue
Show the answer and explanation
Answer: D (average revenue)
Explanation
Under monopolistic competition the AR (demand) curve slopes down less steeply than the MR curve; W is the flatter downward curve and M is MR.