Does marginal revenue equal price?
Understand the Problem
The question is asking whether marginal revenue is equal to price, which pertains to economic concepts related to pricing and revenue. This suggests that the user is seeking clarification on a specific economic principle.
Answer
Marginal revenue equals price in a perfectly competitive market.
The final answer is Marginal revenue equals price in a perfectly competitive market.
Answer for screen readers
The final answer is Marginal revenue equals price in a perfectly competitive market.
More Information
In a perfectly competitive market, firms are price takers, meaning they can sell as much as they want at the market price without reducing it. This makes the marginal revenue equal to the price of the product.
Tips
A common mistake is to assume marginal revenue always equals price in all market structures. This is only true in perfectly competitive markets.
Sources
- Marginal Revenue Explained, With Formula and Example - investopedia.com
- Why price is equal to marginal revenue? - Quora - quora.com
- Marginal revenue - Wikipedia - en.wikipedia.org
