Asked by
Tenagnework Nigussie
on Oct 12, 2024
Verified
For a perfectly competitive firm
A) marginal revenue will graph as an upwardly sloping line.
B) the demand curve will lie above the marginal revenue curve.
C) the marginal revenue curve will lie above the demand curve.
D) the demand and marginal revenue curves are identical.
Marginal Revenue Curve
A graphical representation showing how the addition of one more unit sold affects the total revenue of a firm.
Demand Curve
A graphical representation of the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping.
Perfectly Competitive Firm
A theoretical business entity in an idealized market structure where no single firm can influence the price of its product, due to the presence of numerous sellers offering perfectly substitutable products.
- Detail the interrelation between marginal cost, marginal revenue, average total cost, and its effect on the supply decisions made by firms.
- Describe the demand curve faced by perfectly competitive firms and its implications.
Verified Answer
KM
Learning Objectives
- Detail the interrelation between marginal cost, marginal revenue, average total cost, and its effect on the supply decisions made by firms.
- Describe the demand curve faced by perfectly competitive firms and its implications.