In a graph with output on the horizontal axis and total revenue on the vertical axis, the shape of the total revenue curve for a perfectly competitive seller is
A)U-shaped
B)inverted U-shaped
C)a horizontal line
D)a ray from the origin

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the seller is a price taker, meaning the price at which they can sell their product is constant regardless of the quantity sold. Therefore, total revenue, which is price times quantity, increases linearly with the quantity sold, resulting in a ray from the origin on a graph where output is on the horizontal axis and total revenue is on the vertical axis.

In a Graph with Output on the Horizontal Axis and Total