If a firm in perfect competition charges the market price of $14, then its A) MR = $14 and its AR $14 C) AR = $14 and its ATC = $14 D) AR = MR = $14 E) ATC = MC = $14

Question

If a firm in perfect competition charges the market price of $14, then its
A) MR = $14 and its AR < $14
B) MR = $14 and its AR > $14
C) AR = $14 and its ATC = $14
D) AR = MR = $14
E) ATC = MC = $14

Quizplus · Accepted Answer

In perfect competition, a firm's marginal revenue (MR) equals the market price, and its average revenue (AR) also equals the market price. Therefore, if the market price is $14, both MR and AR are $14.

If a Firm in Perfect Competition Charges the Market Price