If a firm in a perfectly competitive market facing a market price of $2 decides to increase its production from 2,000 units to 4,000 units, the firm's marginal revenue:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the marginal revenue a firm receives from selling an additional unit of output is equal to the market price, which remains constant regardless of the quantity produced. Therefore, if the market price is $2, the marginal revenue from selling one more unit is always $2, regardless of whether the firm is producing 2,000 units or 4,000 units.

If a Firm in a Perfectly Competitive Market Facing a Market