When a certain competitive firm produces and sells 100 units of output, marginal revenue is $80. When the same firm produces and sells 200 units of output, what is average revenue?
A)$40
B)$80
C)$160
D)This cannot be determined from the given information.

Question

Quizplus · Accepted Answer

Since the firm is competitive, average revenue (AR) is equal to marginal revenue (MR).

Given that at 100 units of output, MR = $80. Therefore, AR = $80.

Hence, at 200 units of output, AR will still be $80.

When a Certain Competitive Firm Produces and Sells 100 Units