Question

When perfectly competitive firm X sells three units of product Z, its marginal revenue is $4.67. When it sells one hundred units, marginal revenue is $4.67. We can conclude that the price is: ____

(A) $4.67.
(B) dropping.
(C) The price cannot be calculated with the information given.
(D) too high.

Answer 1

A) $4.67

Step-by-step explanation:

In a perfectly competitive market, marginal revenue always is equal to price. Also, the price is not determined by the firms, it is given by the market because producers doesn´t have any power of decision in this matter.

Due to that, the price is constant, independent the quantity sold.