In the competitive price-taker model, individual firms exert no effect on the market price. Therefore, the firm's marginal revenue curve is
A) indeterminate.
B) an upward-sloping curve.
C) a downward-sloping curve.
D) the same as the firm's demand curve.

Question

Quizplus · Accepted Answer

In a competitive price-taker model, firms are price takers, meaning they sell their products at the market price. Therefore, the firm's marginal revenue is constant and equal to the market price, making the marginal revenue curve the same as the firm's demand curve.

In the Competitive Price-Taker Model, Individual Firms Exert No Effect