In a perfectly competitive market, the equilibrium price is equal to the marginal revenue (MR) for firms in that industry. This is because each firm is a price taker, meaning that they can sell as much quantity as they want at the market price, but they cannot influence the price itself.

### Explanation:

1. **Definition of Marginal Revenue**: Marginal Revenue is the additional revenue that a firm earns from selling one more unit of a good or service.

2. **Perfect Competition**: In a perfectly competitive market, all firms sell identical products and there are many sellers and buyers. The market price is determined by overall supply and demand.

3. **Equilibrium Price and Marginal Revenue**: Since the business can sell any quantity it wishes at the prevailing market price, the price it charges for each additional unit sold remains constant at the market price. Therefore, in this case, at an equilibrium price of $5, the marginal revenue for the business is also $5.

In summary, for a business in a perfectly competitive industry facing an equilibrium price of $5, its marginal revenue is also $5.

Question

In a perfectly competitive market, the equilibrium price is equal to the marginal revenue (MR) for firms in that industry. This is because each firm is a price taker, meaning that they can sell as much quantity as they want at the market price, but they cannot influence the price itself.

### Explanation:

1. **Definition of Marginal Revenue**: Marginal Revenue is the additional revenue that a firm earns from selling one more unit of a good or service.
  
2. **Perfect Competition**: In a perfectly competitive market, all firms sell identical products and there are many sellers and buyers. The market price is determined by overall supply and demand.

3. **Equilibrium Price and Marginal Revenue**: Since the business can sell any quantity it wishes at the prevailing market price, the price it charges for each additional unit sold remains constant at the market price. Therefore, in this case, at an equilibrium price of $5, the marginal revenue for the business is also $5.

In summary, for a business in a perfectly competitive industry facing an equilibrium price of $5, its marginal revenue is also $5.

Knowee AI · Accepted Answer

In a perfectly competitive market, the equilibrium price is equal to the marginal revenue (MR) for firms in that industry. This is because each firm is a price taker, meaning that they can sell as much quantity as they want at the market price, but they cannot influence the price itself.

### Explanation:

1. **Definition of Marginal Revenue**: Marginal Revenue is the additional revenue that a firm earns from selling one more unit of a good or service.
  
2. **Perfect Competition**: In a perfectly competitive market, all firms sell identical products and there are many sellers and buyers. The market price is determined by overall supply and demand.

3. **Equilibrium Price and Marginal Revenue**: Since the business can sell any quantity it wishes at the prevailing market price, the price it charges for each additional unit sold remains constant at the market price. Therefore, in this case, at an equilibrium price of $5, the marginal revenue for the business is also $5.

In summary, for a business in a perfectly competitive industry facing an equilibrium price of $5, its marginal revenue is also $5.

If a business in a perfectly competitive industry is confronted with an equilibrium price of $5, its marginal revenue:

Question

If a business in a perfectly competitive industry is confronted with an equilibrium price of $5, its marginal revenue:

Solution

Explanation:

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