For a firm in a perfectly competitive market, the price of the good is always
A)equal to marginal revenue.
B)equal to total revenue.
C)greater than average revenue.
D)equal to the firm's efficient scale of output.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the firm is a price taker and can only sell its output at the going market price. Therefore, the price of the good is always equal to the firm's marginal revenue, as each additional unit sold adds the market price to total revenue.

For a Firm in a Perfectly Competitive Market, the Price