For a perfectly competitive firm, as its output increases its marginal revenue _______ and its marginal cost _______.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm's marginal revenue remains constant as it increases output, because the price is determined by the market and does not change with the quantity sold by an individual firm. However, marginal cost typically changes (usually increases) as output increases due to the law of diminishing returns.

For a Perfectly Competitive Firm, as Its Output Increases Its