In the perfectly competitive market, individual firms exert no effect on the market price. Therefore, the firm's marginal revenue is:

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Quizplus · Accepted Answer

In a perfectly competitive market, 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 constant and equal to the market price. This makes the marginal revenue curve the same as the demand curve for the firm, which is perfectly elastic (horizontal) at the market price.

In the Perfectly Competitive Market, Individual Firms Exert No Effect