A firm is able to sell any quantity of a good at a given price. The firm's marginal revenue will be:
A)Greater than Average Revenue
B)Less than Average Revenue
C)Equal to Average Revenue
D)Zero

Question

Quizplus · Accepted Answer

When a firm can sell any quantity of a good at a given price, it is operating under perfect competition. In this scenario, the price at which the firm sells its product is constant, and thus, the marginal revenue (the additional revenue from selling one more unit) is equal to the average revenue (total revenue divided by the quantity sold).

A Firm Is Able to Sell Any Quantity of a Good