In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is
A)equal to the price.
B)less than the price.
C)greater than the price.
D)equal to the average cost.

Question

Quizplus · Accepted Answer

In pure competition, the price is determined by the market and each firm is a price taker, meaning they can sell as much as they want at the market price. Therefore, the marginal revenue, which is the additional revenue from selling one more unit, is equal to the price.

In Pure Competition, Each Extra Unit of Output That a Firm