Why under perfect competition AR and MR curves coincide?
In a perfectly competitive market, the AR curve coincides with the MR curve. The reason behind this lies in the fact that in a perfectly competitive market, firm is the price taker and industry is the price maker. That is, the firms has to accept the price set by the industry for the sale of commodities. Thus, in such a case, with the sale of every additional unit of output, the addition to the total revenue (i.e. MR) and the revenue earned per unit of output (i.e. AR) will be equal to the set price. Hence, AR is always equal to MR in a perfectly competitive market and the two curves coincide.