If a firm in a perfectly competitive market triples the quantity of output sold, then total revenue will
A)more than triple.
B)less than triple.
C)exactly triple.
D)Any of the above may be true depending on the firm's labor productivity.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the firm is a price taker, meaning it has no control over the market price. Therefore, if the firm triples its quantity of output sold, its total revenue will also triple, as the price per unit remains constant. This is because the increase in quantity sold will exactly offset the decrease in price per unit.

If a Firm in a Perfectly Competitive Market Triples the Quantity