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Suppose that a firm operating in perfectly competitive market sells 200 units of output at a price of $5 each, find average revenue?

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Final answer:

Average revenue in a perfectly competitive market is found by dividing total revenue by the quantity of units sold. In this example, the firm's average revenue is $5 per unit, which equals the market price.

Step-by-step explanation:

The student is asking about a concept in economics related to a perfectly competitive market. To find the average revenue, we simply divide total revenue by the quantity of units sold. In this scenario, the firm sells 200 units at a price of $5 each.

Therefore, the total revenue is $5 multiplied by 200, which equals $1,000.

Now, the average revenue (AR) is calculated as:

Total Revenue / Quantity Sold = $1,000 / 200 = $5

This means that the average revenue per unit is also $5, which is equal to the market price in a perfectly competitive market since the price is constant and given to the firm.

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