Question

Xavier produces and sells tomatoes in a purely competitive market. This implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the:

Answer 1

Answer: unit price

Explanation:

A purely competitive market is a market whereby there are many firms that produce goods that looks the same and the prices for goods are based on demand of consumers. There's also free entry and exit and no supplier has the right to influence price.

Since Xavier produces and sells tomatoes in a purely competitive market. This implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the unit price.