Question

In perfect competition: a. price and average variable cost are the same. b. price and marginal revenue are the same. c. total revenue and total variable cost are the same. d. price and total revenue are the same.

Answer 1

b. price and marginal revenue are the same.

Step-by-step explanation:

A perfect competition is a market where there are many buyers and sellers of homogenous goods and services.

There are no barriers to entry and exit of firms into the market. As a result of this, firms earn zero economic profit in the long run.

Firms are price takers. Market prices are set by market forces.

Price is equal to marginal revenue and average revenue.

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