For a competitive firm, average revenue always equals the price of the good.This is also true for monopolies.

Question

Quizplus · Accepted Answer

Average revenue is calculated by dividing total revenue by the quantity of output. For a competitive firm, the market price is determined by the supply and demand of the industry, so the average revenue will always equal the price. For a monopoly, the firm has control over the price, but the average revenue will still equal the price because it is the only seller in the market.

For a Competitive Firm, Average Revenue Always Equals the Price