A firm's total revenue in perfect competition is:

Question

Quizplus · Accepted Answer

In perfect competition, a firm is a price taker and has no control over the market price. Therefore, its revenue is determined solely by the quantity of output it sells multiplied by the prevailing market price. Thus, option A is the correct answer. Option B and C are incorrect because the revenue curve would not necessarily be linear in perfect competition. Option D is incorrect because perfectly elastic revenue would only occur if the firm can sell any amount of output at the same price, which is not the case in perfect competition.

A Firm's Total Revenue in Perfect Competition Is