Suppose that a firm operating in perfectly competitive market sells 100 units of output. Its total revenues from the sale are $500. Which of the following statements is correct? (i)
Marginal revenue equals $5.
(ii)
Average revenue equals $5.
(iii)
Price equals $5.
A)(i) only
B)(iii) only
C)(i) and (ii) only
D)(i), (ii), and (iii)

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the price is equal to both marginal revenue and average revenue. Since total revenue is $500 for 100 units, the price per unit is $5, making all statements correct.

Suppose That a Firm Operating in Perfectly Competitive Market Sells