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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
Fill in the Blanks
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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