If the market price is $40 in a perfectly competitive market, what is the marginal revenue from selling the fifth unit?  $8   $20 Correct!  $40   $200

Break Down the Problem

1. Identify the key concept: In a perfectly competitive market, the price at which a good is sold is equal to the marginal revenue (MR) from selling additional units of that good.
2. Focus on the provided data: The market price is $40.

Relevant Concepts

1. In a perfectly competitive market, Marginal Revenue (MR) is equal to the price of the product.
2. Therefore, MR from selling the fifth unit will be equal to the market price.

Analysis and Detail

1. Given that the market price is constant at $40 per unit, the marginal revenue for each additional unit, including the fifth unit, will also be$40.
2. There is no change in price when selling more units since the market is perfectly competitive, leading to a constant MR.

Verify and Summarize

1. As reaffirmed, MR in a perfectly competitive market remains equal to the price of the good, which is $40.
2. Therefore, selling the fifth unit does not change the revenue received per unit sold.

Final Answer

Marginal revenue from selling the fifth unit is $40.