Which of the following is not true for a firm in perfect competition?
A)Profit equals total revenue minus total cost.
B)Price equals average revenue.
C)Average revenue is greater than marginal revenue.
D)Marginal revenue equals the change in total revenue from selling one more unit.

Question

Quizplus · Accepted Answer

In perfect competition, average revenue is equal to marginal revenue. This is because each firm is a price taker and can sell any quantity at the market price, which means that each additional unit sold will have the same price (which is also the average revenue). Therefore, marginal revenue is equal to average revenue in perfect competition.

Which of the Following Is Not True for a Firm