benefit of an additional unit of output is just equal to the marginal cost This fact has an important implication: over a wide range of output, the firm’s marginal cost curve is its supply curve Price and Revenue Each firm in a perfectly competitive market is a price taker; the equilibrium price and industry output are determined by demand and supply Figure 9.3 "The Market for Radishes" shows how demand and supply in the market for radishes, which we shall assume are produced under conditions of perfect competition, determine total output and price The equilibrium price is $0.40 per pound; the equilibrium quantity is 10 million pounds per month Figure 9.3 The Market for Radishes Price and output in a competitive market are determined by demand and supply In the market for radishes, the equilibrium price is $0.40 per pound; 10 million pounds per month are produced and purchased at this price Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 474