The following figure shows the cost and revenue structures of a firm. MC represents the marginal cost curve, AC represents the average cost curve, AR represents the average revenue curve, and MR represents the marginal revenue curve. P* is the equilibrium price and Q* is the equilibrium output.Figure 9.5

-Refer to Figure 9.5. Identify the market structure in which the firm operates.
A)Perfect competition
B)Monopolistic competition
C)Monopoly
D)Monopsony
E)Duopoly

Question

The following figure shows the cost and revenue structures of a firm. MC represents the marginal cost curve, AC represents the average cost curve, AR represents the average revenue curve, and MR represents the marginal revenue curve. P* is the equilibrium price and Q* is the equilibrium output.Figure 9.5
 
-Refer to Figure 9.5. Identify the market structure in which the firm operates.
A)Perfect competition 
B)Monopolistic competition 
C)Monopoly 
D)Monopsony 
E)Duopoly

Quizplus · Accepted Answer

Perfect competition is a market structure in which there are many buyers and sellers, and each firm produces an identical product. In this market structure, firms are price takers, meaning that they have no control over the price of their product.

The Following Figure Shows the Cost and Revenue Structures of a Firm