The correct answer is D. AR=MR.
In perfect competition, firms are price-takers, meaning that they cannot influence the market price of their product. This is because there are many firms in the market, all producing identical products. As a result, each firm faces a perfectly elastic demand curve, which means that it can sell any quantity of its product at the market price.
The marginal revenue curve for a firm in perfect competition is equal to the market price. This is because the firm can sell any additional unit of its product at the market price, and so its marginal revenue is equal to the price.
The average revenue curve for a firm in perfect competition is also equal to the market price. This is because the firm sells all of its output at the market price, and so its average revenue is equal to the price.
Therefore, under perfect competition, the average revenue curve (AR) and the marginal revenue curve (MR) are both equal to the market price (P).