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WAEC Economics 2005 Question 26

Question 26

Market Structures

In the figure above, PN equals average revenue or the marginal revenue cure of

Diagram for this question
  1. A.an imperfect competitive firm
  2. B.a monopoly
  3. C.a perfectly competitive firm
  4. D.a monopolistic competitive firm.
Show the answer and explanation

Answer: C (a perfectly competitive firm)

Explanation

A horizontal line where AR = MR = price is the demand curve of a perfectly competitive firm, which is a price taker.