Which of the following is always true for a perfectly competitive firm?

Question

Quizplus · Accepted Answer

In a perfectly competitive market, each firm is a price taker and cannot influence the market price. Therefore, the firm can sell as much output as it wishes at the prevailing market price. In other words, the demand curve for each firm is perfectly elastic, which means it is a horizontal line at the market price. As the firm sells an additional unit of output, its total revenue increases by the price of the good. Therefore, the marginal revenue for a perfectly competitive firm is equal to the price of the good. Thus, choice D, "Price equals marginal revenue," is always true for a perfectly competitive firm.

Which of the Following Is Always True for a Perfectly