The MR = MC rule can be restated for a purely competitive seller as P = MC because
A) each additional unit of output adds exactly its price to total revenue.
B) the firm's average revenue curve is downsloping.
C) the market demand curve is downsloping.
D) the firm's marginal revenue and total revenue curves will coincide.

Question

Quizplus · Accepted Answer

In a purely competitive market, the price (P) is constant and equal to marginal revenue (MR) because each additional unit sold adds exactly its price to total revenue. Therefore, MR = P, and since profit maximization occurs where MR = MC, it follows that P = MC.

The MR = MC Rule Can Be Restated for a Purely