Under what market structure is a firm's MR curve horizontal?
A) Perfect Competition
B) Monopoly
C) Monopolistic Competition
D) Oligopoly

Question

Quizplus · Accepted Answer

In perfect competition, there are numerous small firms that are price takers, meaning they have no control over the market price. As a result, the demand curve that the firm faces is perfectly elastic, meaning it is horizontal at the market price. This means that the marginal revenue curve for a firm in perfect competition is also perfectly elastic, or horizontal.

Under What Market Structure Is a Firm's MR Curve Horizontal