If a perfectly competitive firm decreases production from 11 units to 10 units and the market price is $20 per unit,total revenue for 10 units is:

Question

Quizplus · Accepted Answer

Since the firm is perfectly competitive, it is a price taker and the market price is given at $20 per unit. When production is decreased from 11 units to 10 units, the firm's total revenue will decrease by the price of one unit ($20) because they are no longer selling that additional unit. Therefore, total revenue for 10 units is:
10 units x $20/unit = $200

If a Perfectly Competitive Firm Decreases Production from 11 Units