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WAEC Economics 2010 Question 20

Question 20

Market Structures

Which of the following is obtainable in a perfect market?

  1. A.P = MR > AR
  2. B.MP = MC > P
  3. C.MR < P
  4. D.P = MR = MC
Show the answer and explanation

Answer: D (P = MR = MC)

Explanation

A perfect competitor's price equals MR, and it produces where MR = MC, so P = MR = MC.