Explanation:

- Demand curve in perfect competition is also the firm's average revenue (AR) and marginal revenue (MR) curve, and it’s a horizontal line.

- Option 1: Average revenue

- In perfect competition, the AR curve is the same as the demand curve; they coincide. So, it doesn’t lie below the demand curve.

- Option 2: Average cost

- This is the per unit cost of production. It can be above or below the price (demand curve), and it’s not always downward sloping; it’s U-shaped.

- Option 3: Marginal revenue

- In perfect competition, MR also coincides with the demand (and AR) curve; it does not lie below but exactly on the demand curve.

- Option 4: Marginal cost

- Marginal cost is usually upward sloping in the relevant range, not downward.

So, the correct answer is:

Option 3 is NOT correct. All revenue curves (AR and MR) are at the same level as the demand curve in perfect competition.

The correct interpretation is: In imperfect competition (like monopoly), MR lies below demand and slopes downward. In perfect competition, MR and AR are flat and the same as demand.