The marginal revenue from the last unit of a product sold by a firm in pure competition is:
A) equal to the product's price.
B) less than the product's price.
C) greater than the product's price.
D) equal to, less than, or greater than the product's price, depending on how much is sold.

Question

Quizplus · Accepted Answer

In pure competition, the price is determined by the market and each firm is a price taker, meaning they cannot influence the price of the product. Therefore, the marginal revenue, which is the additional revenue from selling one more unit, is equal to the price of the product for a firm in pure competition.

The Marginal Revenue from the Last Unit of a Product