What describes the total revenue for a perfectly competitive firm?

In a perfectly competitive market, the total revenue for a firm is the product of the price of the good and the quantity sold. Since firms in this type of market are price takers, they sell their product at the market price, which remains constant regardless of the amount they sell. This relationship leads to total revenue increasing by a constant amount for each additional unit sold.

As a firm expands its output, total revenue, which is calculated as price multiplied by quantity (TR = P x Q), increases linearly. For instance, if a firm sells 100 units at a price of $10 per unit, its total revenue will be $1,000. If it sells one more unit (101 units), its total revenue increases to $1,010. Thus, each additional unit sold adds the same amount to total revenue, confirming that it increases by a constant amount as output rises.

This principle is a fundamental characteristic of perfect competition, distinguishing it from other market structures where total revenue might change at varying rates due to price changes or different selling strategies.