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| 1. |
What is the relation between market price and marginal revenue of a price-taking firm ? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Market price is equal to <a href="https://interviewquestions.tuteehub.com/tag/marginal-555038" style="font-weight:bold;" target="_blank" title="Click to know more about MARGINAL">MARGINAL</a> revenue (MR). It happens because the price-taking firm can <a href="https://interviewquestions.tuteehub.com/tag/sell-1200244" style="font-weight:bold;" target="_blank" title="Click to know more about SELL">SELL</a> more <a href="https://interviewquestions.tuteehub.com/tag/quantity-1174212" style="font-weight:bold;" target="_blank" title="Click to know more about QUANTITY">QUANTITY</a> of <a href="https://interviewquestions.tuteehub.com/tag/output-1142821" style="font-weight:bold;" target="_blank" title="Click to know more about OUTPUT">OUTPUT</a> at the same price. It means, revenue from every additional unit (MR) is equal to price or average revenue (AR) as Price = AR.</body></html> | |