Any help with this problem would be sweet Tuna Inc. sells tuna in a perfectly co

Question

Any help with this problem would be sweet

Tuna Inc. sells tuna in a perfectly competitive market. Tuna Inc. is able to sell tuna for S600 per unit. In this market, there are 2,000 Arms competing with one another. Last year, Tuna Inc. was able to earn an economic profit of $1,000,000. The firm has purchased a permit to fish this season, insurance in case one of their workers gets hurt on the job, and a boat. Together, these items represent all of the firm's fixed costs and sum to $100,000. Last year. Tuna Inc.'s total revenue was S1,300,000 What is the marginal revenue per unit for this firm?

Explanation / Answer

For a perfectly competitive firm, its marginal Revenue equals price at which it sells its products.

In this case, even though the firm incurred an increase in fixed cost of $100,000 it cannot raise its price, being operative in a perfectly competitive market. Therefore, price remains unchanged at $600.

So, marginal revenue = Price = $600

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