Question

A firm is able to sell any quantity of a good at a given price (i.e. a situation of perfect competition). The firm’s MR will be:

पर्याय

• MR > AR

• MR = AR

• MR < AR

• none of these

Answer 1

MR = AR

Explanation:

Under perfect competition, each additional unit is sold at the same market price. Both marginal revenue and average revenue equal that price, so MR = AR.