Final answer:
The average revenue per unit is $5, which is equal to the marginal revenue in a competitive market. By dividing the total revenue of $1,000 by the average revenue per unit, we find that 200 units were sold.
Step-by-step explanation:
The average revenue per unit is calculated by dividing the total revenue by the number of units sold. Given that the firm's total revenue is $1,000, and we know the marginal revenue, which is the additional revenue from selling one more unit, is $5, we can infer that the price per unit is equal to the marginal revenue in a competitive market. Therefore, the average revenue per unit is also $5. To find the number of units sold, we divide the total revenue by the average revenue per unit. So, $1,000 divided by $5 per unit gives us 200 units sold.
Hence, the correct answer is C. $5 and 200 units. Average revenue per unit = Total revenue / Marginal revenue Therefore, Average revenue per unit = $1,000 / $5 = $200. To find the number of units sold, we divide the total revenue by the average revenue per unit: Number of units sold = Total revenue / Average revenue per unit Therefore, Number of units sold = $1,000 / $200 = 5 units.