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Explain the nature of the AR and MR curves under perfect and imperfect competition.

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AR and MR curves, under perfect competition, are equal to each other and parallel to OX-axis. The price at AR is constant as it is fixed by industry with every additional sale of unit MR will be equal to AR.

Under imperfect competition, a firm is the price maker having control over the price but it has to lower down its price in order to sell more. So revenue curves (AR and MR) are downward sloping from left to right indicating that more units of output can be sold at a lower price. Therefore AR > MR.

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