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 isA. DroppingB. $4.67C. Too highD. the price cannot be calculated with the information

Answer 1

B) $4.67

Step-by-step explanation:

By definition marginal revenue is the revenue generated by the sale of one more unit of product Z.

Marginal revenue = unit price

Since firm X participates in a perfectly competitive market, it is a price taker, and since the marginal revenue is constant, we can assume that this is the equilibrium price of product Z.