In perfect competition, a ﬁrm's _____.
A) average revenue equals average cost
B) total revenue equals total ﬁxed cost
C) price equals marginal revenue
D) average cost equals price

Question

Quizplus · Accepted Answer

In perfect competition, the price of the product is given for all firms, meaning they cannot influence the price by altering the quantity of output they produce. Therefore, the price at which they sell their product is equal to the marginal revenue, which is the additional revenue earned by selling one more unit of the product.

In Perfect Competition, a ﬁRm's _____