If a Perfectly Competitive Firm Sells 50 Units of Output

question 180

Multiple Choice

If a perfectly competitive firm sells 50 units of output at a market price of $10 per unit, its marginal revenue is:

• A) more than $10.
• B) less than $10.
• C) $10.
• D) $5300.

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Definitions:

Consumer Surplus

Consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay.

Perfect Price Discrimination

A market scenario where a seller charges each buyer their maximum willingness to pay, resulting in the seller capturing all available consumer surplus.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers.

Perfectly Price Discriminate

A pricing strategy where a seller charges the highest price that each individual customer is willing to pay, thus capturing the maximum possible revenue.