For a perfectly competitive firm, as its output increases, its marginal revenue {Blank} and its...
Question:
For a perfectly competitive firm, as its output increases, its marginal revenue _____ and its marginal cost _____.
A. changes; changes
B. changes; does not change
C. does not change; changes
D. does not change; does not change
Output and Revenue:
Revenue for a single-price firm is price multiplied by quantity sold. Revenue may actually decrease with output if price elasticity of demand is less than 1. At such a point, the increase in output in percentage terms is less than the decrease in price.
Answer and Explanation: 1
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View this answerAnswer: C
A firm in a perfectly competitive market has a constant marginal revenue since it is a price-taker. These firms can't sell any output at...
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Imperfect Competition in Economics: Definition & Examples
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Chapter 22 / Lesson 2
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Learn the definition of imperfect competition and understand how it works. Study imperfect competition examples: monopoly, oligopoly, and monopolistic competition.
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