In perfect competition, why is a firm's marginal revenue curve also the demand curve for the firm's output?
What will be an ideal response?
A perfectly competitive firm's demand curve is a horizontal line at the market price. This result means that the price it receives is the same for every unit sold. The marginal revenue received by the firm is the change in total revenue from selling one more unit, which is the constant market price. So a perfectly competitive firm's demand curve is the same as its marginal revenue curve.
You might also like to view...
What is a commitment device?
What will be an ideal response?
In the decade immediately following emancipation, former slaves
a. were willing to work under the gang system in return for wages and benefits. b. decreased their labor supply. c. obtained ownership of roughly 40 percent of southern farms. d. moved to northern states in large numbers.