Question

Which of the following statements regarding a competitive market is not correct? a. Price and marginal revenue are equal. b. Because of firm location or product differences, some firms can charge a higher price than other firms and still maintain their sales volume. c. Price and average revenue are equal. d. There are many buyers and many sellers in the market.

Answer 1

. Because of firm location or product differences, some firms can charge a higher price than other firms and still maintain their sales volume.

Step-by-step explanation:

A competitive market is characterised by many buyers and sellers of homogenous goods and services.

Buyers and sellers are price takers. Market price is set by forces of demand and supply. If a firm increases the price of its product, its sales falls.

Price = marginal revenue = average revenue

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