When a firm faces a horizontal demand curve, the marginal revenue for the firm is .

less than price

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equal to price

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equal to MC

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equal to AVC

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Solution

The correct option is B equal to price
When demand is perfectly elastic, marginal revenue is equal to price as a change in price will lead to a complete loss of business.

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Similar questions

The marginal revenue is equal to the price for a monopoly firm. State true or false.

Draw average and marginal revenue curves of a firm under monopoly.

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