For a firm in a perfectly competitive market,_____ revenue equals _____.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers and cannot influence the market price. Therefore, the marginal revenue earned by the firm will be equal to the market price. Total revenue is the price per unit multiplied by the quantity sold, which gives us the firm's total earnings. However, in a perfectly competitive market, the price is given and fixed for the firm, so total revenue will be equal to price multiplied by the quantity sold, which is also equal to marginal revenue multiplied by the quantity sold. Therefore, the correct answer is B, marginal revenue equals market price.

For a Firm in a Perfectly Competitive Market,_____ Revenue Equals