If a perfectly competitive firm sells 10 units of output at a market price of $5 per unit, its marginal revenue per unit is:
A) $5.
B) $50.
C) more than $5 but less than $50.
D) less than $5.

Question

Quizplus · Accepted Answer

In perfect competition, a firm is a price taker, meaning that the market sets the price and the firm has no control over it. Therefore, the marginal revenue per unit is equal to the market price per unit, which in this case is $5.

If a Perfectly Competitive Firm Sells 10 Units of Output