Suppose That a Firm Operating in Perfectly Competitive Market Sells

question 425

Multiple Choice

Suppose that a firm operating in perfectly competitive market sells 100 units of output. Its total revenues from the sale are $500. Which of the following statements is correct? (i)
Marginal revenue equals $5.
(ii)
Average revenue equals $5.
(iii)
Price equals $5.

• A)(i) only
• B)(iii) only
• C)(i) and (ii) only
• D)(i), (ii), and (iii)

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Definitions:

Term Deposit

A deposit at a financial institution that has a fixed term and typically offers a higher interest rate than a regular savings account.

Simple Interest

A method of calculating interest where the charge is based on the original principal amount alone, without compounding.

Interest

Interest is the cost of borrowing money, typically expressed as a percentage of the principal amount.

Rate Of Interest

The percentage of principal charged by the lender for the use of its money.