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:

Wage Level

The average rate of pay for workers or employees within a specific area or sector.

Labor Demand

The total amount of workers that employers are willing and able to hire at a given wage rate.

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible, typically characterized by the absence of cyclical unemployment.

Combined Value

The total worth generated by merging two or more elements, products, or processes, which is often greater than the sum of their separate values.