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 each firm is a price taker and can sell any quantity of output at the market price without having to lower the price.

The Marginal Revenue Curve of a Purely Competitive Firm