Question 31
Market StructuresWhich of the following is not true of a firm in equilibrium condition in perfect competition?
- A.MC is rising
- B.MC curve cuts AC curve from below
- C.MR>AR
- D.MC = AC = MR = AR
Show the answer and explanation
Answer: C (MR>AR)
Explanation
In perfect competition MR = AR = price, so MR can never be greater than AR.