Derivation of TR, AR and MR under perfect competition Derivation of TR, AR and MR under perfect competition

# Derivation of TR, AR and MR under perfect competition

## Derivation of TR, AR, and MR under perfect competition:

Perfect competition is a market structure having a large number of buyer and sellers selling homogeneous products at a uniform price. The TR, AR, and MR under Perfect competition can be derived as follows:

In the above schedule, we can see that the value of TR is increasing at the same rate because every additional of the commodity is sold at Rs.10. Average revenue remains constant at all levels of output. AR, MR, and price are equal to each other. It can be graphically explained as follows:
In the above diagram, we can see that the TR curve is increasing at a constant rate. AR and MR curve are the same and they coincide with each other. They are the same at all levels of output. TR curve is positively sloped whereas AR and MR are a horizontal straight line parallel to the x-axis.