+1 vote
in Class 12 by kratos

Why is price per unit equal to AR and MR under perfect competition?

1 Answer

+5 votes
by kratos
 
Best answer

Under perfect competition, all the units are sold at the same price. As a result, the Average Revenue comes equal to the price per unit of the commodity. Also, each additional unit is also sold at the same price per unit which makes Marginal Revenue also equal to the price per unit of the commodity.

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