Suppose that in a competitive market the equilibrium price is $2.50. What is marginal revenue for the last unit sold by the typical firm in this market?
A)less than $2.50
B)more than $2.50
C)exactly $2.50
D)The marginal revenue cannot be determined without knowing the actual quantity sold by the typical firm.

Question

Quizplus · Accepted Answer

In a competitive market, the marginal revenue is equal to the market price. Therefore, the marginal revenue for the last unit sold by the typical firm in this market is exactly $2.50.

Suppose That in a Competitive Market the Equilibrium Price Is