The total revenue of a firm is increasing at a constant rate. Which of the following is true about this firm?

It is operating in a perfect market and can sell any quantity of the good at given price.

The correct answer is Option (2) → It is operating in a perfect market and can sell any quantity of the good at given price.

If total revenue (TR) increases at a constant rate, it means:

Marginal Revenue (MR)=ΔTR/ ΔQ = Constant

This happens when the price remains constant regardless of the quantity sold — i.e., the firm faces a perfectly elastic (horizontal) demand curve.

Such a situation occurs only in a perfectly competitive market, where:

• The firm is a price taker.

• It can sell any quantity of the good at the given market price.

Hence, the firm is operating in a perfect market and can sell any quantity at a fixed price.