The slope of the total revenue curve for a perfectly competitive firm equals

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Quizplus · Accepted Answer

In a perfectly competitive market, the firm can sell as much output as it wants without affecting the market price. Therefore, the price remains constant for the firm, and since total revenue is calculated by multiplying price by the quantity sold, the slope of the total revenue curve is equal to the constant price. Marginal revenue, however, is the change in total revenue resulting from a one-unit change in output, and in a perfectly competitive market, this change in output does affect the market price. Therefore, marginal revenue is less than the constant price. Thus, the slope of the total revenue curve is equal to price, which is C.

The Slope of the Total Revenue Curve for a Perfectly