The diagram above shows a firm operating under conditions of monopolistic competition. The curve W represents its

The diagram above shows a firm operating under conditions of monopolistic competition. The curve W represents its

Answer Details

The curve W represents the average revenue of the firm. In a monopolistically competitive market, a firm faces a downward sloping demand curve and is able to set its price above the marginal cost due to product differentiation. The average revenue curve shows the relationship between the price of the product and the quantity sold, indicating the revenue per unit of output. The marginal revenue curve, on the other hand, shows the additional revenue generated by selling one additional unit of output. Therefore, the correct answer is average revenue.