When marginal revenue equals price for all levels of output,the firm is operating in a perfectly competitive market.

Question

Quizplus · Accepted Answer

In perfectly competitive markets, the price is determined by the market and is the same for all firms. Therefore, when marginal revenue equals price, the firm is operating in a perfectly competitive market. If marginal revenue is greater than price, the firm can increase profits by increasing output, while if marginal revenue is less than price, the firm can increase profits by decreasing output.

When Marginal Revenue Equals Price for All Levels of Output,the