The marginal revenue curve for a perfectly competitive firm
A)is downward-sloping.
B)is the same as its demand curve.
C)is perfectly inelastic.
D)is the same as its marginal cost curve.

Question

Quizplus · Accepted Answer

In perfect competition, the firm is a price taker and the demand curve faced by the firm is perfectly elastic. Since the firm has no control over the market price, the marginal revenue curve is also perfectly elastic and identical to the demand curve. Therefore, the correct answer is B, which states that the marginal revenue curve for a perfectly competitive firm is the same as its demand curve.

The Marginal Revenue Curve for a Perfectly Competitive Firm