Xavier produces and sells tomatoes in a purely competitive market. This implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the
A)unit price.
B)average cost.
C)variable cost.
D)unit profit.

Question

Quizplus · Accepted Answer

In a purely competitive market, the price is determined by the market, and each firm is a price taker, meaning they cannot influence the price of their product. Therefore, the marginal revenue, which is the additional revenue from selling one more unit, is always equal to the market price of the product, or the unit price.

Xavier Produces and Sells Tomatoes in a Purely Competitive Market