When a perfectly competitive firm sells additional units of output, ________, and when a monopolist sells additional units of output, ________.
A)total revenue always rises; total revenue could rise, fall, or remain unchanged
B)total revenue does not change; total revenue rises
C)marginal revenue stays the same; marginal revenue rises
D)total revenue rises; total revenue falls

Question

Quizplus · Accepted Answer

For perfectly competitive firms, marginal revenue is equal to price. For firms that face a downward sloping demand curve, selling another unit can increase revenue, decrease revenue, or keep revenue the same.

When a Perfectly Competitive Firm Sells Additional Units of Output