Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List)
Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List)
12th Edition
ISBN: 9781285738352
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 9, Problem 1VQP
To determine

The condition of P = MR in a perfectly competitive market.

Expert Solution & Answer
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Explanation of Solution

Price is always equal to the marginal revenue of a firm in a perfectly competitive market. This is because of the charging of uniform price in the perfectly competitive market. And there is no change in price as additional quantity of output sale. It is expressed in Table 1 as follows:

Table 1

PriceQuantityTotal RevenueMarginal Revenue
$2512525
$2525025
$2537525

Table 1 represents that in a perfectly competitive market, the price is equal to marginal revenue.

Economics Concept Introduction

Marginal revenue: Marginal revenue is the addition to the total revenue that results from selling an extra unit of output.

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