Squeeze Inc. sells orange juice in a market where there are a large number of consumers and sellers. New firms can enter the market easily and also exit whenever they want to. It sells 40 bottles in a month at a price of $4 per bottle and incurs a cost of $5 per bottle. The average revenue of the firm:
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will be greater than the marginal revenue.
will be less than the marginal revenue.
is $4, which is equal to the marginal revenue.
is $2, which is less than the market price.