The total revenue of a purely competitive firm from selling 6 units of output is $48. Based on this information, the unit price of the output must be
A) $8.
B) $42.
C) $288.
D) $54.

Question

Quizplus · Accepted Answer

In a purely competitive market, the firm is a price taker, which means that it has no control over the price of its product. The market determines the price based on supply and demand. Therefore, the firm's revenue is calculated by multiplying the price per unit by the quantity sold.

In this case, we know that the total revenue from selling 6 units is $48. Therefore, we can set up the following equation:

Revenue = Price x Quantity 
$48 = Price x 6

Solving for Price, we get: 
Price = $48 / 6 
Price = $8

Therefore, the unit price of the output must be $8.

The Total Revenue of a Purely Competitive Firm from Selling