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Economic Definition of monopolistic competition average revenue curve. Defined.

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Term monopolistic competition average revenue curve Definition: A curve that graphically represents the relation between average revenue received by a monopolistically competitive firm for selling its output and the quantity of output sold. Because average revenue is essentially the price of a good, the average revenue curve is the demand curve for the firm's output. In general, the average revenue curve reflects the degree of market control held by a firm. For a monopolistically competitive firm with a small degree of market control, the average revenue (and demand) curve is is negatively-sloped. The average revenue is used in conjunction with a firm's average total cost curve to determine economic profit.

 

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