Customers query: Why is the fresh new limited funds contour having a completely aggressive organization exactly like their consult curve?
A completely competitive firm’s demand bend is actually a lateral line in the the market industry rates. The marginal revenue received by the enterprise ‘s the improvement in overall revenue regarding offering an additional equipment, which is the constant market value. Very a completely competitive firm’s demand bend matches their marginal funds contour.
How come consult equivalent marginal funds to own perfectly aggressive providers?
Specifically, price only means limited cash during the prime competition. Rates equals MR inside primary race because your consult bend is actually lateral. Regardless of what far your create, it always carries at the same rate. In other industry formations, you could potentially improve otherwise lower prices.