Question

Suppose a firm’s total revenue is $100 when it sells 10 units, and $110 when it sells 11 units. The firm, therefore, is a(n):

Answer 1

perfect competitor

Step-by-step explanation:

Given:

Firm's total revenue when 10 units are sold = $100

Firm's total revenue when 11 units are sold = $110

Average Revenue =
`\frac{\textup{Total revenue}}{\textup{Total units sold}}`

or

Average Revenue =
`(100)/(10)` = $10

and,

the marginal revenue = $110 - $100 = $10

Since,

the average revenue and the marginal revenue for the firm is equal,

therefore, the is a perfect competitor