True or False?
The statement is true. Average revenue equals total revenue divided by the quantity and therefore equals the price. The average revenue curve and the demand curve are thus the same thing. And the marginal revenue curve is always below the demand curve for output quantities greater than one unit when the firm's demand curve is negatively sloped, as must always be the case under monopolistic competition. Under perfect competition, the firm's average revenue is constant and equal to the price and marginal revenue is therefore equal to its average revenue and price.