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.