Question

Changes in the output of a perfectly competitive firm, without any change in the price of

the product, will change the firm’s

a. Total revenue

b. Marginal revenue

c. Average revenue

d. Average and marginal revenue both​

Answer 1

Answer:

B is the correct answer

Explanation:

Marginal revenue

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Answer 2

Option A is the correct answer.

Changes in the output of a perfectly competitive firm, without any change in the price of the product, will change the firm’s total revenue.

This is so because if there is a change in output it will lead to:

• change in total revenue because total revenue = price * total output

1. In perfectly competitive market a firm can sell as much quantity as it wants to at the given price that is prevailing in the market.
2. Since the demand curve is horizontal in case of perfectly competitive market, it implies that marginal revenue =average revenue= price. Therefore, if price is constant there will be no change in marginal revenue and average revenue.