The marginal revenue curve of a purely competitive firm
A) lies below the firm's demand curve.
B) is downsloping because price must be reduced to sell more output.
C) is horizontal at the market price.
D) has all of these characteristics.

Question

Quizplus · Accepted Answer

In a purely competitive market, the marginal revenue curve is horizontal at the market price because the firm is a price taker and can sell any quantity at the market price without affecting it.

The Marginal Revenue Curve of a Purely Competitive Firm