Question

In a perfectly competitive market, what values are always equal?

-Price and average total cost
-Price and total revenue
-Marginal revenue and average revenue
-Marginal revenue and average total cost

Answer 1

In a perfectly competitive market, the values that are always equal are price and average revenue, as well as price and marginal revenue

Step-by-step explanation:

A perfectly competitive firm in a perfectly competitive market has several values that are always equal. One of them is price, which is determined by market demand and supply. Price is the same as marginal revenue for a perfectly competitive firm, so these two values are always equal. Another pair of values that are always equal is average revenue and marginal revenue.

Average revenue is the total revenue divided by the quantity produced, and it is the same as price for a perfectly competitive firm. So, in a perfectly competitive market, the values that are always equal are price and average revenue, as well as price and marginal revenue.