Asked Nov 7, 2019

6. Problems and Applications Q6

A firm in a competitive market receives $1,120 in total revenue and has marginal revenue of $20.
The firm's average revenue is_____, and_______units were sold.

Expert Answer

Step 1

In a perfectly competitive market, the profit maximizing condition is where the marginal cost is equal to marginal revenue, average revenue and price (MC=MR=AR=P).

Step 2

It is given that the marginal revenue is $20; so that the average revenue (AR) also be $20.

Step 3

The quantity of units sold can b...

Total revenue

Image Transcriptionclose

Total revenue Quantity Price 1120 20 =56


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