Table 8.4
$\begin{array}{cc}
\begin{array}{c}
\text { Quantity } \
\text { of Output }
\end{array} & \text { Market Price (\$) } \
\hline 0 & 0 \
10 & 5 \
20 & 5 \
30 & 5 \
40 & 5 \
50 & 5
\end{array}$
-Refer to Table 8.4,which shows the output supplied by a firm and its total revenue.As this is a competitive market structure,what is the difference between average revenue and marginal revenue?

Question

Table 8.4
 $\begin{array}{cc}
\begin{array}{c}
\text { Quantity } \
\text { of Output }
\end{array} & \text { Market Price (\$) } \
\hline 0 & 0 \
10 & 5 \
20 & 5 \
30 & 5 \
40 & 5 \
50 & 5
\end{array}$
-Refer to Table 8.4,which shows the output supplied by a firm and its total revenue.As this is a competitive market structure,what is the difference between average revenue and marginal revenue?

Quizplus · Accepted Answer

In a competitive market, the firm is a price taker and therefore average revenue is equal to the market price, which is constant at $5 in this case. Marginal revenue is also equal to the market price in a competitive market, so it stays constant at $5 as well. Thus, the difference between average and marginal revenue is zero and stays constant at all levels of output. Therefore, the answer is B.

Table 84 -Refer to Table 8