Answered: In a perfectly competitive market, what…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In a perfectly competitive market, what is the marginal revenue curve?

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Step 1

Meaning of Perfectly Competitive Market:

The perfectly competitive market exists when there is a large number of sellers and buyers that are engaged in the sale and purchase of a commodity and where no individual seller or buyer has any control over the prices of the product. The price of the product is determined by the forces of market supply and market demand.

The concept of perfect competition is much broader in scope than pure competition. This means the perfectly competitive market does include i.e. larger number of buyers and sellers, homogenous products, and free entry and exit of firms.

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