For a firm in a perfectly competitive industry, price equals marginal revenue.

Name: For a firm in a perfectly competitive industry, price equals marginal revenue.
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Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers, meaning they accept the market price. Since they can sell as much as they want at the market price, the price of the product equals the additional revenue from selling one more unit, which is the definition of marginal revenue.

For a Firm in a Perfectly Competitive Industry, Price Equals