Problem
1. Explain why a demand curve is also a curve of average revenue. Recalling that when an average revenue curve is neither rising nor falling, marginal revenue must equal average revenue, explain why it is always true that P = MR = AR for the perfectly competitive firm.
2. Regarding the four attributes of perfect competition (many small firms, freedom of entry, standardized product, and perfect information):
a. Which is primarily responsible for the fact that the demand curve of a perfectly competitive firm is horizontal?
b. Which is primarily responsible for the firm's zero economic profits in long-run equilibrium?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.