For an individual firm operating in a competitive market, marginal revenue equals to its average revenue and price.
A competitive market refers to the market environment where different businesses compete with each other with the motive of earning high profit and attracting large number of buyers.
It is a kind of market structure in which market cannot be influenced by single consumer or producer, as they do not have the power to influence the market.
A competitive firm's marginal revenue is always equal to its average revenue and price because the price remains constant over varying levels of output.
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