9) What is the behaviour of average revenue in a market in which a firm can sell any quantity of a good at a given price?
Dear student,
The market where a firm can sell any quantity of a good at the given price is perfect competition market. In such a market the AR is constant and is equal to price. Accordingly, the Average Revenue curve is a horizontal straight line parallel to the x-axis.
The market where a firm can sell any quantity of a good at the given price is perfect competition market. In such a market the AR is constant and is equal to price. Accordingly, the Average Revenue curve is a horizontal straight line parallel to the x-axis.