The fact that a perfectly competitive firm's total revenue curve is an upward-sloping straight line implies that
A)The total profit curve is also an upward-sloping straight line.
B)Product price is constant at all levels of output.
C)Product price decreases as output increases,and demand is elastic.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers and have no control over the market price. Therefore, the product price remains constant at all levels of output. This leads to the total revenue curve being an upward-sloping straight line, as each unit sold brings in the same amount of revenue. However, the total profit curve is not necessarily an upward-sloping straight line as it depends on the firm's cost structure. The fact that the total revenue curve is upward-sloping implies constant product price, not decreasing product price as in option C.

The Fact That a Perfectly Competitive Firm's Total Revenue Curve