What is the shape of Average Revenue (AR) curve under perfect competition?

Horizontal straight line.

The correct answer is Option (1) → Horizontal straight line.

Under perfect competition, a firm is a price taker — it cannot influence the market price and must sell its product at the prevailing market price.

• As a result, Average Revenue (AR), which is total revenue divided by quantity sold, remains constant at all levels of output.

• Therefore, the AR curve is a horizontal straight line parallel to the X-axis, indicating that price = AR = MR at all output levels.