Suppose a firm in a perfectly competitive market doubles its sales. This means that the firm's total revenue will:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the firm is a price taker and cannot influence the market price. Therefore, if the firm doubles its sales, the quantity demanded in the market remains the same, and the firm's revenue would exactly double as well (assuming no change in costs). This is because, in a perfectly competitive market, the demand curve is perfectly elastic, meaning that the firm can sell as much as it wants at the market price.

Suppose a Firm in a Perfectly Competitive Market Doubles Its