For a firm in a perfectly competitive market,what must the price of the good always be

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm is a price taker, meaning it cannot influence the market price. Therefore, it must accept the market price as given. Since the demand curve is perfectly elastic, the firm's marginal revenue is equal to the market price. In order to sell one more unit, the firm must lower the price for all units sold, so MR < P. Therefore, the price of the good must always be equal to marginal revenue.

For a Firm in a Perfectly Competitive Market,what Must the Price