A perfectly competitive firm with a random demand has an expected demand curve that is_______ its expected marginal revenue curve.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm's demand curve is perfectly elastic, meaning it is horizontal at the market price. This implies that the marginal revenue, which is the additional revenue from selling one more unit, is equal to the price for each unit sold. Therefore, the expected demand curve is equal to its expected marginal revenue curve.

A Perfectly Competitive Firm with a Random Demand Has an Expected