If a competitive firm is selling 1,000 units of its product at a price of $9 per unit and earning a positive profit,then

Question

Quizplus · Accepted Answer

If the competitive firm is selling 1,000 units of its product at a price of $9 per unit and earning a positive profit, it means that the firm's total revenue is greater than its total cost. Therefore, its total cost must be less than $9,000 (1,000 units sold at $9 per unit). Options B and C are incorrect because in a perfectly competitive market, the price and marginal revenue are equal, and the average revenue is also equal to the price. Therefore, both the marginal and average revenue will be equal to $9 in this case. Option D is incorrect because competitive firms can earn positive profits in the short run, although they will be competed away in the long run.

If a Competitive Firm Is Selling 1,000 Units of Its