Which of the following is not correct for a firm operating under perfect competition?

None of the above

The correct answer is Option 4: None of the above

All the given statements are correct for a firm operating under perfect competition:

1. The price line is also the firm’s AR curve under perfect competition – Correct

   • In perfect competition, the price remains constant, so the AR curve coincides with the price line, forming a horizontal straight line at price p.

2. Marginal Revenue (MR) = Average Revenue (AR) – Correct

   • Since firms can sell any quantity at the same price, each additional unit sold adds exactly the same amount to total revenue.
   • Thus, MR = AR = Price in perfect competition.

3. Marginal Revenue (MR) = Market Price – Correct

   • MR is the additional revenue from selling one more unit.
   • In perfect competition, since price is fixed, the revenue from each extra unit is exactly equal to the price, making MR = Price.