In a purely competitive market, the price per unit to a buyer equals:

• A. the average total cost of all firms
• B. the market equilibrium price
• C. the highest price any buyer is willing to pay
• D. the marginal cost of production for the last unit sold

Answer: (B)

Verified step by step guidance

1. Understand the nature of a purely competitive market: it consists of many buyers and sellers, where no single participant can influence the market price.
2. Recall that in perfect competition, firms are price takers, meaning the price is determined by the overall market supply and demand, not by individual firms or buyers.
3. Recognize that the market equilibrium price is the price at which the quantity demanded by buyers equals the quantity supplied by sellers.
4. Note that in this market, the price per unit to a buyer is equal to the market equilibrium price, not necessarily the average total cost, highest willingness to pay, or marginal cost of the last unit sold.
5. Summarize that the key concept is that the market equilibrium price balances supply and demand, and this is the price buyers pay in a purely competitive market.