Under which of the following market structures, AR of the firm will be equal…
2019
Under which of the following market structures, AR of the firm will be equal to MR?
Answer: D. Perfect competition — Answer: In a perfectly competitive market the firm is a price taker, so Average Revenue (AR) equals Marginal Revenue (MR), and both equal the market price…
- A.
Monopoly
- B.
Monopolistic competition
- C.
Oligopoly
- D.
Perfect competition
Attempted by 58 students.
Show answer & explanation
Correct answer: D
Answer: In a perfectly competitive market the firm is a price taker, so Average Revenue (AR) equals Marginal Revenue (MR), and both equal the market price (P). Why AR = MR: AR = Total Revenue
Loading lesson…