Suppose that a firm operating in perfectly competitive market sells 50 units of output. Its total revenues from the sale are $500. Which of the following statements is correct?

Question

Quizplus · Accepted Answer

(i) is incorrect because we do not have enough information to determine if the price is constant or not. 
(ii) is correct since we can determine the average revenue by dividing the total revenue by the quantity sold: $500/50 = $10. 
(iii) is incorrect as we do not have enough information to determine if the firm is making a profit or a loss.

Suppose That a Firm Operating in Perfectly Competitive Market Sells