For perfectly competitive firms,
A) marginal revenue equals total revenue.
B) marginal revenue equals price.
C) total revenue equals price.
D) all of the above

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the price of the product is determined by the market and is the same for all firms. Therefore, the marginal revenue, which is the additional revenue from selling one more unit, equals the price of the product. Choices A and C are incorrect because marginal revenue refers to the additional revenue from selling one more unit, not the total revenue, and total revenue is price times quantity, not equal to price alone.

For Perfectly Competitive Firms