Market Price for Product M in a Competitive Market

What is the market price for product M when P=MR=$250?

(a) $250

(b) $200

(c) $300

(d) $150

Final answer:

Answer:

In a competitive consumer electronics market, the market price for product M is $250.

In a perfectly competitive market, the market price for a product is determined where Price equals Marginal Cost equals Marginal Revenue (P=MC=MR). Given that P=MR=$250, the market price for Product M in this scenario would be $250.

Explanation:

In a competitive consumer electronics market, when the Price equals Marginal Revenue and is given as $250 (P=MR=$250), this implies that the market price for product M is also $250. In a perfectly competitive market, firms are price takers and the price is determined at the equilibrium where supply meets the demand. Here, Price equals Marginal Cost equals Marginal Revenue (P=MC=MR).

The provided information indicates that the marginal cost of production varies. But in the context of the equation P=MR=$250, it can be assumed that $250 is the equilibrium price where the market clears. Hence, given the options, the correct answer should be (a) $250.