What do you mean by under conditions of perfect competition in the product market ........

Economics- Phase (I & II) Demand and Supply , Market Structures

What do you mean by under conditions of perfect competition in the product market?

MRP=VMP

MRP>VMP

VMP>MRP

None of the above

- Option 1: MRP = VMP

- Under perfect competition, the marginal revenue product (MRP) equals the value of the marginal product (VMP).

- Firms are price-takers, selling at a constant price.

- Every additional unit of output generates revenue equal to the price times the marginal product.

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- Option 2: MRP > VMP

- This means the revenue from an additional unit is greater than its value, which doesn't happen in perfect competition.

- Option 3: VMP > MRP

- This indicates the value of output is higher than the revenue gained, which isn't typical in perfect competition.

- Option 4: None of the above

- Incorrect as option 1 is true for perfect competition.

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