The perfectly competitive firm's marginal revenue curve is:
A) exactly the same as the marginal cost curve.
B) downward-sloping, at twice the (negative) slope of the market demand curve.
C) vertical.
D) horizontal.
E) upward-sloping.

Question

Quizplus · Accepted Answer

In perfect competition, the firm is a price taker and can sell as much output as it wants at the market price. Therefore, the firm's marginal revenue curve is horizontal, because any additional unit sold will bring in the same amount of revenue.

The Perfectly Competitive Firm's Marginal Revenue Curve Is