Figure 7.4
-Suppose that Figure 7.4 shows an industryʹs market demand, its marginal revenue, and the production costs of a representative firm. If the industry was perfectly competitive, a representative firm would charge a price of:
A)$35.
B)$25.
C)$20.
D)$16.

Question

Figure 7.4
-Suppose that Figure 7.4 shows an industryʹs market demand, its marginal revenue, and the production costs of a representative firm. If the industry was perfectly competitive, a representative firm would charge a price of:
A)$35. 
B)$25. 
C)$20. 
D)$16.

Quizplus · Accepted Answer

In a perfectly competitive market, firms charge a price equal to the market price, which is where the market demand curve intersects the firm's marginal cost curve.

Figure 7.4 -Suppose That Figure 7.4 Shows an Industryʹs Market Demand, Its