If ABC Company sells its product in a competitive market,then

Question

Quizplus · Accepted Answer

In a competitive market, the price is determined by the market and not by the individual company. Therefore, option A is incorrect. Option C may not be true as there might be economies of scale and the cost may not increase in proportion to the quantity of output. Option D is also incorrect as total revenue is the product of price and quantity, while average revenue is the total revenue divided by quantity. Total revenue is not necessarily equal to average revenue. However, option B is true as the total revenue of a company is directly proportional to the quantity of output it sells in a competitive market as the price remains constant.

If ABC Company Sells Its Product in a Competitive Market,then