Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List)
12th Edition
ISBN: 9781285738352
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 9, Problem 1VQP
To determine
The condition of P = MR in a
Expert Solution & Answer
Explanation of Solution
Price is always equal to the marginal revenue of a firm in a perfectly competitive market. This is because of the charging of uniform price in the perfectly competitive market. And there is no change in price as additional quantity of output sale. It is expressed in Table 1 as follows:
Table 1
Price | Quantity | Total Revenue | Marginal Revenue |
$25 | 1 | 25 | 25 |
$25 | 2 | 50 | 25 |
$25 | 3 | 75 | 25 |
Table 1 represents that in a perfectly competitive market, the price is equal to marginal revenue.
Economics Concept Introduction
Marginal revenue: Marginal revenue is the addition to the total revenue that results from selling an extra unit of output.
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Students have asked these similar questions
Q55
In a perfectly competitive market, when are economic profits possible?
O Long-run
O Economic profits are always zero, firms earn normal profit
O Any time, it depends on the indivual firm
O Short run
Refer to the above graph for a purely competitive firm in the short run. The price of the firm's product
is given by:
TC
TR
9,800
S,600
2,100
300
800
1,400
Output (Q)
Select one:
O A. $7
OB. $10
O C. $8
OD. $9
Chapter 9 Solutions
Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List)
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.1 - Prob. 4STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.2 - Prob. 4STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2ST
Ch. 9.3 - Prob. 3STCh. 9.3 - Prob. 4STCh. 9.4 - Prob. 1STCh. 9.4 - Prob. 2STCh. 9 - Prob. 1VQPCh. 9 - Prob. 2VQPCh. 9 - Prob. 3VQPCh. 9 - Prob. 4VQPCh. 9 - Prob. 5VQPCh. 9 - Prob. 1QPCh. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Many plumbers charge the same price for coming to...Ch. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - According to the accompanying table, what quantity...Ch. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNGCh. 9 - Prob. 8WNGCh. 9 - Prob. 9WNGCh. 9 - Prob. 10WNG
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- Please show how to calculate the graph thank youarrow_forwardPlease explain how to calculate the profit calculationarrow_forwardD Question 6 Consider the graph below. Should this firm stay open or shut down in the short run and why? ATC MC ATC* A AVC* pe 10 Stay open because their loss from operating is greater in magnitude than their fixed costs Stay open because their loss from operating is less in magnitude than their fixed costs Shut down because their loss from operating is greater in magnitude than their fixed costs O Shut down because their loss from operating is less in magnitude than their fixed costs B AVC -MRarrow_forward
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- Question What should the perfectly competitive firm do in the short run, and why? What will this firm do in the long run? Current production = 10,000 Current price = $15 Total cost $300,000 Fixed cost = $200,000 Marginal cost = $15 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a C d Shutdown in the short run, because their shutdown loses will be $100,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Shutdown in the short run, because their shutdown loses will be $50,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should…arrow_forwardsimply answer the questionarrow_forwardConsider the graph below. Should this firm stay open or shut down in the short run and why? ATC* P* AVC* A B 10 MC AVC -MR q ATC Stay open because their loss from operating is greater in magnitude than their fixed costs Stay open because their loss from operating is less in magnitude than their fixed costs O Shut down because their loss from operating is greater in magnitude than. their fixed costs Shut down because their loss from operating is less in magnitude thanarrow_forward
- dont give me plagiarised answerarrow_forwardWhy is a firm in a perfectly competitive market called a price taker? Why do the price, MR and demand faced by a firm in such a market coincide? Explain. Please don,t copy from anywhere. Please answer step by step. if posssible use graph.arrow_forwardPlease see the attached36arrow_forward
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