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In a purely competitive market, marginal revenue is a constant that is equal to which of the following?

Multiple choice question.

quantity
consumer surplus
average total cost
price

User Mr Pang
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1 Answer

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Final answer:

In a purely competitive market, marginal revenue is equal to the price.

Step-by-step explanation:

In a purely competitive market, the marginal revenue is equal to the price.

For a perfectly competitive firm, marginal revenue is constant because it is determined by the market price. The firm takes the market price as given and increases its quantity of output. As a result, total revenue steadily increases at a constant rate determined by the market price.

User Ritika
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