Mindtap Economics, 1 Term (6 Months) Printed Access Card For Arnold's Microeconomics, 12th
12th Edition
ISBN: 9781305396739
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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Prove that for a perfectly competitive firm, P = MR
Chapter 9 Solutions
Mindtap Economics, 1 Term (6 Months) Printed Access Card For Arnold's Microeconomics, 12th
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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- What are the four basic assumptions of perfect competition? Explain in words what they imply for a perfectly competitive firm.arrow_forwardWhy will losses for firms in a perfectly competitive industry tend to vanish in the long run?arrow_forwardSince a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?arrow_forward
- If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market?arrow_forwardWhat two rules does a perfectly competitive firm apply to determine its profit-maximizing quantity of output?arrow_forwardBriefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.arrow_forward
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