The marginal revenue curve of a competitive firm is
A) U-shaped.
B) a ray from the origin.
C) a horizontal line at the market price.
D) downward sloping.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm is a price taker, meaning it must accept the market price for its output. Therefore, the marginal revenue curve for a competitive firm is a horizontal line at the market price, because any additional unit of output sold will receive the same price as all other units sold.

The Marginal Revenue Curve of a Competitive Firm Is