Which of the following is true for a single firm in a perfectly competitive industry?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aP = ATCbMR = AVCcP = MRdP > MR
Question
Which of the following is true for a single firm in a perfectly competitive industry?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aP = ATCbMR = AVCcP = MRdP > MR
Solution
The correct answer is c) P = MR.
In a perfectly competitive market, the price that a firm can sell its product is determined by the market. Therefore, the price (P) is equal to the marginal revenue (MR), which is the additional revenue that a firm receives from selling one more unit of its product. This is because in perfect competition, firms are price takers and can sell as much quantity as they want at the market price. Therefore, the additional revenue from selling one more unit (marginal revenue) is always equal to the market price.
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