ECONOMICS
PROFIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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duopoly reigns
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Totall revenue = average revenue
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average revenue < marginal revenue
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average revenue = marginal revenue
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monopsony reigns
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Detailed explanation-1: -In a perfectly competitive market, the Average Revenue is equal to the price of a product and the marginal revenue, while in a monopolistic or oligopolistic market it is higher than the marginal revenue.
Detailed explanation-2: -For a perfectly competitive firm, marginal revenue equals price and average revenue. This implies that the firm’s marginal cost curve is its short-run supply curve for values greater than average variable cost.
Detailed explanation-3: -For a perfectly competitive firm, average revenue is equal to the market price. There are many sellers and buyers in perfect competition, and the products are identical. In perfect competition, the sellers are price takers, which means they apply the prices determined by the forces of demand and supply.
Detailed explanation-4: -The total revenue curve is a straight line sloping upward from the origin because a perfectly competitive firm can sell all units brought to market at the same price, the market price.