question archive The reason price equals marginal revenue in a perfectly competitive market is that: (a) since price is constant, the added revenue from selling one or more unit is the price (b) marginal revenue is always equal to marginal cost (c) the law prohibits marginal revenue from diverging from the market price (d) consumer advocacy groups maintain a steady price
The reason price equals marginal revenue in a perfectly competitive market is that: (a) since price is constant, the added revenue from selling one or more unit is the price (b) marginal revenue is always equal to marginal cost (c) the law prohibits marginal revenue from diverging from the market price (d) consumer advocacy groups maintain a steady price
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The reason price equals marginal revenue in a perfectly competitive market is that:
(a) since price is constant, the added revenue from selling one or more unit is the price
(b) marginal revenue is always equal to marginal cost
(c) the law prohibits marginal revenue from diverging from the market price
(d) consumer advocacy groups maintain a steady price
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The correct statement is (b) marginal revenue is always equal to marginal cost
Explanation:
In the perfect competition, the equilibrium price is the marginal revenue price, equating its marginal cost. Therefore, one can conclude that the equilibrium price will be equal to marginal revenue in the marketplace as equilibrium is the point where price, MC, and MR equates.
