For firms that sell one product in a perfectly competitive market,the market price is:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, all firms sell a homogenous product and have no control over the market price. Therefore, the market price is constant, regardless of the quantity sold. Since there are no barriers to entry, all firms earn normal profits in the long run, which means that the market price is equal to both average revenue (AR) and marginal revenue (MR) for a firm. Therefore, all three statements are true for a firm that sells one product in a perfectly competitive market.

For Firms That Sell One Product in a Perfectly Competitive