Exhibit 7-1 Quantity and total revenue data for a firm Exhibit 7-1 indicates that this firm is operating in which type of market structure?

Question

Exhibit 7-1  Quantity and total revenue data for a firm  Exhibit 7-1 indicates that this firm is operating in which type of market structure?

Quizplus · Accepted Answer

The quantity and total revenue data shown in Exhibit 7-1 indicates that the firm is operating in a perfect competition market structure. The firm is not a price-maker as it has to accept the market price and cannot influence it. The fact that the firm is generating revenue but not making profits does not determine the market structure. The data does not suggest the presence of product differentiation or nonhomogeneous goods, ruling out options D and A.

Exhibit 7-1 Quantity and Total Revenue Data for a Firm