For firms that sell one product in a perfectly competitive market,average revenue:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, there are many buyers and sellers, and no one has the power to influence the market price. Therefore, the price is the same for all producers, and the average revenue for each firm is equal to the market price. Option A is incorrect because average revenue is calculated by dividing total revenue by output, not the other way around. Option B is incorrect because marginal cost is the additional cost of producing one more unit, not the same as average revenue. Option D is incorrect because one of the options is correct.

For Firms That Sell One Product in a Perfectly Competitive