If a perfectly competitive firm sells 50 units of output at a market price of $10 per unit, its marginal revenue is:
A) more than $10.
B) less than $10.
C) $10.
D) $5300.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, each firm is a price taker, meaning it must accept the market price as given. Thus, the marginal revenue for each additional unit sold is equal to the market price ($10), since the firm's sales have no effect on the market price. Therefore, the answer is C, $10.

If a Perfectly Competitive Firm Sells 50 Units of Output