Explanation:

Perfect competition is a market structure where a large number of small firms produce homogeneous goods. The firms in this market structure are price takers, which means they have no control over the market price. They have to accept the prevailing market price to sell their goods. In such a market structure, the average revenue of a firm is equal to its marginal revenue.

Why is Average Revenue equal to Marginal Revenue in Perfect Competition?

In perfect competition, the market price is given and the firms have to accept it. Therefore, the average revenue of the firm is equal to the market price. Since the firm can sell any quantity of the good at the prevailing market price, its marginal revenue is also equal to the market price. Hence, in perfect competition, the average revenue of a firm is equal to its marginal revenue.

Why is Average Revenue not equal to Marginal Revenue in other Market Structures?

In other market structures like monopoly, monopolistic competition, and oligopoly, the firms have some degree of market power. They have the ability to influence the market price by adjusting the quantity produced. Therefore, the marginal revenue of the firm is less than the market price. In these market structures, the firm's marginal revenue curve lies below the average revenue curve. Consequently, the average revenue of the firm is greater than its marginal revenue.

Conclusion:

In conclusion, the perfect competition market structure is the only market structure where the average revenue of a firm is equal to its marginal revenue. In other market structures, the marginal revenue of the firm is less than the market price, and hence the average revenue of the firm is greater than its marginal revenue.

Perfect competition
MR nd AR represented by the same curve