Answer to Question #232557 in Microeconomics for lavhesta

Question

If a firm in a perfectly competitive market doubles the number of units of output sold, then total revenue will

• A. more than double.
• B. exactly double.
• C. remain constant.
• D. less than double.

Answer 1

If a certain competitive firm tends to double the output amount being used for the production of a certain amount of goods then it would be observed that there would be a rise in their level of revenue. This implies that their revenue would tend to get doubled as well due to which there would be an increase in profit margins.

Hence, the correct option is B.