Question

Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.

Short answer

Marginal Revenue Curve is constant, horizontal line parallel to x axis.

Step-by-step solution

Definition 

Perfect Competition is a market form, where large number of buyers and sellers exchange homogenous goods at constant prices.

Explanation 

Price and Average revenue are the same.

When price and average revenue are constant, total revenue increases at a constant rate and marginal revenue is constant.

Numerical and graph 

P = AR	Q	TR = P x Q	MR = TR n - TR n -1
5	1	5	5
5	2	10	5
5	3	15	5

As MR is Constant irrespective of quantity, the curve is horizontal parallel to x axis.