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A firm is able to sell any quantity of a good at a given price. The firm's Marginal Revenue will be ______ -

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Question

A firm is able to sell any quantity of a good at a given price. The firm's Marginal Revenue will be ______

Options

  • More than average revenue

  • Less than average revenue

  • Equal to average revenue

  • None of the above

MCQ
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Solution

A firm is able to sell any quantity of a good at a given price. The firm's Marginal Revenue will be Equal to average revenue.

Explanation:

When a company may sell any amount of a product at any price. When the price of a good remains constant, this occurs under perfect competition. The marginal revenue of the firm is then equal to the average revenue.

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