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JAMB Economics 2000 Question 22

Question 22

Market Structures

Quantity of commodity sold | Total Revenue from sales of commodity
43 | ₦ 228.00
44 | ₦ 233.00
45 | ₦ 238.00
The firm whose sales and total revenue of the commodity as given above is

  1. A.a monopolist
  2. B.a monopolistic competitor
  3. C.a perfect competitor
  4. D.an oligopolist.
Show the answer and explanation

Answer: C (a perfect competitor)

Explanation

Each extra unit adds the same ₦5 to total revenue, so marginal revenue is constant, as for a perfect competitor who sells every unit at the same price.