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For a firm in a perfectly competitive​ market, price is

A. greater than marginal revenue but less than average revenue.
B. less than both average revenue and marginal revenue.
C. equal to average revenue but greater than marginal revenue.
D. equal to both average revenue and marginal revenue.

User Holden
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1 Answer

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Answer:

The correct answer is D. equal to both average revenue and marginal revenue.

Step-by-step explanation:

A perfectly competitive market or market of perfect competition is that market in which two characteristics are fulfilled:

1) there is a large number of buyers and sellers in such a way that the influence they individually exert on prices is negligible;

2) the goods or services that are exchanged are the same. [Supply and demand] Perfect competition is the situation of a market where companies lack the power to manipulate the price (price-acceptors), and there is a maximization of well-being.

This results in an ideal situation of the goods and services markets, where the interaction of supply and demand determines the price. A perfectly competitive market has the following characteristics: There are many buyers and sellers in the market. The goods offered by different vendors are largely identical. Companies can freely enter and exit the market.

User Polyclick
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