The fact that a purely competitive firm's total revenue curve is linear and upsloping to the right implies that
A)product price increases as output increases.
B)product price decreases as output increases.
C)product price is constant at all levels of output.
D)marginal revenue declines as more output is produced.

Question

Quizplus · Accepted Answer

In a purely competitive market, the price of the product remains constant regardless of the level of output produced by the firm. This is because individual firms are price takers due to the large number of firms in the market, each producing a small fraction of the total market supply. Therefore, the total revenue curve is linear and upsloping, reflecting a constant price per unit sold.

The Fact That a Purely Competitive Firm's Total Revenue Curve