The following figure shows revenue and cost curves of a monopolist.Figure 11.8
AR: Average revenue curve
MR: Marginal revenue curve
MC: Marginal cost curve
-According to Figure 11.8, what will be the price charged by a perfectly competitive firm?

Question

The following figure shows revenue and cost curves of a monopolist.Figure 11.8

AR: Average revenue curve
MR: Marginal revenue curve
MC: Marginal cost curve
-According to Figure 11.8, what will be the price charged by a perfectly competitive firm?

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers and will charge the market price, which is determined by the intersection of the market demand and supply curves. In Figure 11.8, this price is represented by P₃.

The Following Figure Shows Revenue and Cost Curves of a Monopolist.Figure