What Is the Relationship Among the Following Variables in for a Perfectly

question 176

Multiple Choice

What is the relationship among the following variables in for a perfectly competitive firm: the market price, average revenue and marginal revenue?

• A) Average revenue is equal to the market price; average revenue is greater than marginal revenue.
• B) The market price is equal to both average revenue and marginal revenue.
• C) Average revenue is equal to marginal revenue; average revenue is greater than the market price.
• D) As a firm lowers the market price to sell more output, marginal revenue and average revenue will be less than the market price.

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Definitions:

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, often a percentage of the transaction.

Appliances

Electrical or mechanical machines that perform domestic functions, such as refrigerators or washing machines.

Net Proceeds

The final amount of money received from a transaction after deducting all associated costs and expenses.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, typically a percentage of the sales or services sold.