Asked by
Alyson Muehlman
on Nov 27, 2024Verified
Xavier produces and sells tomatoes in a purely competitive market. This implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the
A) unit price.
B) average cost.
C) variable cost.
D) unit profit.
Marginal Revenue
The additional revenue generated from selling one more unit of a good or service; crucial for determining the optimal level of output for profit maximization.
Purely Competitive Market
A market structure characterized by many buyers and sellers, homogeneous products, and the ease of entering and exiting the market.
Unit Price
The cost per unit of volume or weight of a product, allowing for easier comparison of costs between different sized packages of the same item.
- Assess the significance of marginal revenue and its linkage to price in the context of a purely competitive firm.
Verified Answer
BG
Learning Objectives
- Assess the significance of marginal revenue and its linkage to price in the context of a purely competitive firm.