If a firm in perfect competition sells 10 units of output at $5 per unit,its marginal revenue is:

A) $5.
B) more than $5 but less than $50.
C) $50.
D) $250.

Question

If a firm in perfect competition sells 10 units of output at $5 per unit,its marginal revenue is:A) $5.B) more than $5 but less than $50.C) $50.D) $250.

Mrithika Mahendran · Accepted Answer

Final Answer : A, Explanation :  In perfect competition, the firm is a price taker and cannot influence the market price. Therefore, the price remains constant at $5 per unit. Since the firm sells 10 units, its total revenue is 10 x $5 = $50. Marginal revenue is the change in total revenue when one more unit is sold. In this case, when the firm sells one more unit, total revenue increases from $50 to $55, so the marginal revenue is $5.

If a firm in perfect competition sells 10 units of output at $5 per unit,its marginal revenue is:

A) $5.
B) more than $5 but less than $50.
C) $50.
D) $250.

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