Question

If a perfectly competitive firm decreases production from 11 units to 10 units and the market price is $20 per unit, total revenue for 10 units is: Select one: a. $20. b. $210. c. $200. d. $10.

Answer 1

Answer: C. $200

Explanation:

Total revenue = price × quantity

= $20 × 10 = $200

A perfectly competitive firm is a firm that is a price taker; it doesn't set the price for its goods.

If the firm reduces the quantity produced, total revenue falls too.