For a perfectly competitive firm, to what is average revenue equal?
A)Marginal cost.
B)The market price.
C)Total revenue.
D)Average fixed cost.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the firm is a price taker and cannot influence the market price. Consequently, the average revenue earned by the firm is equal to the price of the product, which is determined by the market. Therefore, option B, which states that average revenue is equal to the market price, is the correct answer.

For a Perfectly Competitive Firm, to What Is Average Revenue