Final answer:
In a purely competitive product market, the extra revenue a firm gains from producing an additional unit of output, or marginal revenue, stays the same as quantity of output increases because the price is determined by the market and is constant for each unit sold.
Step-by-step explanation:
In a purely competitive product market, the extra revenue from producing an additional unit of output, referred to as marginal revenue (MR), stays the same as quantity of output increases. This is because, under perfect competition, the price at which each unit is sold is determined by the market and does not change with the output level of an individual firm. Marginal revenue is equal to the market price for each additional unit sold and this will not fluctuate as long as the market price remains constant. A firm's profits are maximized when marginal revenue is equal to marginal cost (MC). If a firm's marginal costs are higher than the marginal revenue, then it will reduce its profits for every additional unit produced.