Asked by Raabiah Azeez on Jul 05, 2024
Verified
Which of the following is characteristic of a purely competitive seller's demand curve?
A) Price and marginal revenue are equal at all levels of output.
B) Average revenue is less than price.
C) Its elasticity coefficient is 1 at all levels of output.
D) It is the same as the market demand curve.
Demand Curve
A graphical representation showing the relationship between the price of a good and the amount consumers are willing to buy at various prices.
Elasticity Coefficient
A measure that indicates how much the quantity demanded of a good or service changes in response to a change in price.
Average Revenue
The revenue a company receives for selling one unit of a product, or the total revenue divided by the quantity of products sold.
- Comprehend the attributes and consequences of entirely competitive market environments for enterprises.
Verified Answer
ND
Natalie DeniseJul 06, 2024
Final Answer :
A
Explanation :
In a purely competitive market, the demand curve faced by an individual seller is perfectly elastic because the seller is a price taker, meaning price equals marginal revenue at all levels of output. This reflects the fact that the seller can sell any quantity of the good at the market price.
Learning Objectives
- Comprehend the attributes and consequences of entirely competitive market environments for enterprises.