CFOR THE TEST, REMEMBER

For the test, remember: All firms, regardless of whether they are price takers, price searchers, monopolists,

or oligopolists, maximize profits where MR = MC. Just know how price fits into all of this! Here, the firm is

operating under pure competition (a price taker). When a firm operates under conditions of pure

competition, marginal revenue always equals price because, in pure competition, price is constant (a

horizontal line) so the MR is constant.