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Determine the market price that Firm A receives for its product. Assume the price is constant because the firm is a price taker in a perfectly competitive market.

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Answer: $28

Step-by-step explanation:

In a Perfectly Competitive Market, firms are price takers in that the price is set by the market. As a result, the Price is equal to the Average Revenue as well as the Marginal Revenue. P = AR = MR

In the table, the Marginal Revenue (increase in revenue when an additional unit is sold) is $28 for all quantities and the Average Revenue at the fifth (and all units) is;

= 140/5

= $28

With both the Average and Marginal Revenues being $28, the price that Firm A receives is $28 as well.

Determine the market price that Firm A receives for its product. Assume the price-example-1
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