Question

A firm's total revenue in perfect competition is:_______

Group of answer choices
A) a linear,
B) horizontal line.
C) perfectly elastic.
found by multiplying its output by the price at which it sells that output.
A) a linear,
B) downward-sloping line.

Answer 1

A) a linear, B) downward-sloping line.

Step-by-step explanation:

• As the company would maximize its profit thus it divides the total revenue by quantity. As a form in a competitive market with the perfect competition, it has a profit which is completely revenu to the total costs. Which is calculated by the formula:

• Total Revenue = Price * Quantity

• The Average Revenue will be = Total Revenue / Quantity

• The Marginal Revenue shall be = Change in Total Revenue / Change in Quantity of the product.

• The AR will be the amount of revenue a company receives for each unit of output. The MR will be the change in the total revenue of output sold.

• For the perfect competition, both the AR and MR will be equal to price.