00:01
So here we're talking about competition, and we're given a few propositions to evaluate.
00:06
So average revenue equals to price only for competition is the first one.
00:13
Well, what the heck is average revenue? well, revenue is equal to price times quantity.
00:21
That means that average revenue is equal to revenue over q is equal to pq over q is equal to pq over q is equal to p.
00:30
So this is actually always true.
00:34
And that makes a, the right answer.
00:39
Because it will be true for all market, for all firms.
00:44
It doesn't matter, right? whether they're monopoly or monopolistically competitive, for any type of firm, average revenue equals price.
00:53
So that's the right answer.
00:54
But let's go through the rest and show why they're presumably correct.
00:59
If competition in b, we're told that average total cost equals marginal cost.
01:07
Average total cost is equal to marginal cost.
01:11
This is correct in competition.
01:18
And that's because both of these things are equal to price...