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5. (Points: 2) Marginal revenue is equal to price for a competitive firmbecause

ID: 1243718 • Letter: 5

Question

5.

(Points: 2) Marginal revenue is equal to price for a competitive firmbecause

a. Total revenue increases by less thanthe price of the good when an additional unit is sold
b. Firms need to lower price to increasethe quantity sold
c. Firms canincrease price and still increase the quantity sold
d. Total revenues increases by more thanthe price of the good when an additional unit is sold
e. Individual firms donot affect the market price of the good when they increase thequantity they produce.

5.

(Points: 2) Marginal revenue is equal to price for a competitive firmbecause

a. Total revenue increases by less thanthe price of the good when an additional unit is sold
b. Firms need to lower price to increasethe quantity sold
c. Firms canincrease price and still increase the quantity sold
d. Total revenues increases by more thanthe price of the good when an additional unit is sold
e. Individual firms donot affect the market price of the good when they increase thequantity they produce.

Explanation / Answer

The answer is (D)

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