If the market price is $2 and a perfectly competitive firm is producing 1,000 units and the marginal cost to produce the 1,000th unit is $2, the difference between marginal revenue and marginal cost (MR - MC)is zero.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the price is equal to the marginal revenue for each firm. Therefore, if the market price is $2 and the firm is producing 1,000 units at a marginal cost of $2, then the marginal revenue for the firm is also $2. Thus, MR - MC = $2 - $2 = $0.

If the Market Price Is $2 and a Perfectly Competitive