For a perfectly competitive firm ?
Correct answer: A. Price equals marginal revenue
- A. Price equals marginal revenue
- B. price is greater than marginal revenue
- C. price equals total revenue
- D. price equals total cost
Explanation
A perfectly competitive firm can sell any feasible quantity at the prevailing market price, so its marginal revenue from another unit equals that price. Thus price equals marginal revenue.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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