For a purely competitive ?firm, A. marginal revenue is less than the price becau

Question

For a purely competitive ?firm,

A. marginal revenue is less than the price because the firm can sell as much output as it chooses at the nbsp market price.

B. marginal revenue is less than the price because the firm must lower the price for each additional unit it wants to sell.

C. price is equal to marginal revenue because the firm can sell as much output as it chooses at the nbsp market price.

D. price is equal to marginal revenue because the firm must lower the price for each additional unit it wants to sell.

Explanation / Answer

In a purely competitive markets, price is set by the industry and not by the individual firm, so all firms can sell as much quantity as they want at prevailing price and they don't change the price for selling any extra unit of output.

It means price and MR are equal in the case of purely competitive firm.

Hence option C is the correct answer.

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