Question

Changes in the output of a perfectly competitive firm, without any change in the price of the product, will change the firm's

Select one:

a.

total revenue.

b.

marginal revenue.

c.

average revenue.

d.

All of the above are correct.

Answer 1

ANSWER:

Marginal revenue - Marginal revenue refers to additional revenue earned by selling one more unit. So marginal revenue of a firm in perferct competition changes when there is change in units sold.

Average revenue - Under perfect competition average revenue is equal to marginal revenue. Therefor, average revenue will also change when there is change in units sold.

Therefore, when 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.

As marginal and average revenue will change when there is change in units sold.

So,  the answer is (a) total revenue.