Step 1: Understanding the Concept:
In a perfectly competitive market, there are a large number of buyers and sellers dealing in homogeneous products.
Because each firm is a "price taker," it must sell its products at the equilibrium price determined by the market.
Step 2: Detailed Explanation:
In this market structure, the following relationships hold true:
1. Price (P) = Average Revenue (AR) = Marginal Revenue (MR): Since the price remains constant for every unit sold, the revenue per unit (AR) and the additional revenue from selling one more unit (MR) are both equal to the market price. This validates options (A) and (C).
2. Price Line/Demand Curve: The price line is horizontal (perfectly elastic), showing that any quantity can be sold at the market price. This validates option (B).
3. Total Revenue (TR): $TR$ is calculated as $P \times Q$. Since $P$ is a constant positive value, $TR$ increases at a constant rate as output ($Q$) increases.
Therefore, the $TR$ curve is a positively sloped straight line starting from the origin, not a horizontal line.
Step 3: Final Answer:
The statement in option (D) is incorrect because a horizontal $TR$ curve would imply that total revenue is constant regardless of output, which is false.