Suppose That a Firm Operating in Perfectly Competitive Market Sells

question 563

Multiple Choice

Suppose that a firm operating in perfectly competitive market sells 200 units of output at a price of $3 each. Which of the following statements is correct? (i)
Marginal revenue equals $3.
(ii)
Average revenue equals $600.
(iii)
Average revenue exceeds marginal revenue, but we don't know by how much.

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

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Definitions:

Corporate Profits

The earnings of corporations after expenses and taxes have been deducted.

Stock Prices

The monetary value assigned to a company's ownership shares, as determined by market supply and demand.

Positive Prices

Prices that are above zero, indicating that a commodity has value and is being traded in a market.

Net Earnings

The amount of profit that remains after all operating expenses, taxes, and interest are subtracted from total revenue.