Marginal revenue of a firm is constant throughout under: (a) Perfect Competition (b) Monopolistic Competition (c) Oligopoly (d) All the above
Understand the Problem
The question is asking about the conditions under which marginal revenue remains constant for a firm. It presents multiple market structures as options and asks for the correct one.
Answer
Perfect competition.
The final answer is Perfect competition.
Answer for screen readers
The final answer is Perfect competition.
More Information
In a perfect competition market structure, firms are price takers, meaning they cannot change the market price and sell all units at the same price. Therefore, the marginal revenue, which is the additional revenue from selling one more unit, is constant and equals the market price.
Tips
A common mistake is to assume that marginal revenue is constant in other market structures like monopolistic competition or oligopoly, where firms have some control over pricing.
Sources
AI-generated content may contain errors. Please verify critical information
