Perfect competition - increase in sales by one firm

CFA Level I Economics
#1

Firm X operates in a perfectly competative industry. They expand production and unit sales of good “ABC” by 10%. The most likely result would be: I. a 10% increase in total revenue

II. a 10% increase in average revenue

III. an increase in total revenue of less than 10%

The answer given is " a 10% increase in total revenue"

In perfect competition (because firms are small) any firm that increases output wont have any effect on price. That I understand, but if they increase sales by 10% without any change in price, wouldn’t that net them a loss? It seems like they would be moving up the MC line while the price remaned the same. What am I missing here?

#2

MC has no impact on revenue received. It does have an impact on the bottom line, and if MC>MR, then they would be losing. But, impacts on the bottom line isn’t one of your options.

#3

They’re price takers: they sell everything at the market price. If their output increases by 10%, their revenue increases by 10%. Depending on where they are on their average cost curve, that may result in lower profit, the same profit, or higher profit.