Shape of Demand Curve ill Pure Competition
When there is pure competition, the average revenue curve (AR) or demand curve of a firm is a horizontal straight line which means that any firm can sell any quantity at the prevailing price. Since the number of firms is very large, no individual firm has the power to vary the market price. Also. since the products arc identical from the consumer’s point of view, the price paid by them cannot be different. This is represented by the following diagram.Examples of pure competition arc to be found in the case of farm products, e.g., wheat, colton, rice, etc. In this case, there is a large number of producers, each producing an in significant portion of the total market supply. In other So pure competition.
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