Demand curve in a perfectly competitive market can also be called as

The correct answer is Option 3: Both 1 and 2

n a perfectly competitive market, the demand curve faced by an individual firm has the following characteristics:

1️⃣ It is perfectly elastic (horizontal).

• Since the firm is a price taker, it can sell any quantity at the given market price but cannot influence the price.

2️⃣ It is also the Average Revenue (AR) Curve. (Option 1 - AR curve)

• Average Revenue (AR) = Total Revenue / Quantity = Price (P).
• Since price remains constant for a competitive firm, AR is equal to the demand curve.

3️⃣ It is also called the Price Line.  (Option 2 - Price Line)

• Since the firm must accept the market price, the demand curve is the same as the price line.