Concept: Revenue of a Firm Farmer Jones grows oranges in Florida. Suppose the market for oranges is perfectly competitive and that the market price for a crate of oranges is $11 per crate. Fill in total revenue, average revenue, and marginal revenue in the table below. (Enter your responses as integers.) Average Marginal Crates of Market Price Total Revenue Revenue Revenue (per crate) $11 Oranges (TR) (AR) (MR) $ 1 11 $ 2 11 3 11 4 11 5 11 OOOD

3. Profit maximization in the cost-curve diagram Suppose that the market for frying pans is a competitive market. The following graph shows the daily cost curves of a firm operating in this market Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 100 90 Profit or Loss 80 70 ATC 60 50 40 30 AVC 20 MC 10 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pans per day) In the short run, at a market price of $50 per pan, this firm will choose to produce 37,500 pans per day. PRICE (Dollars perpan)

. Mr DIY is a new small scale palm oil supplier. There are many small scale palm oil suppliers in the market. The price of oil palm is solely determined by the market demand and supply. Describe the market characteristics of this industry. As Mr DIY is a new firm in the market, his firm is facing a problem of revenue lesser than the total variable costs. Illustrate the situation with an appropriate diagram(s). Evaluate the situation of this firm and provide one suggestion for the firm to sustain in the long run.

QUESTION 20 Study the table below which represents the cost and price schedules facing a perfectly competitive firm that manufactures bulbs. Use this information to answer the question. Quantity of the product 0 1 2 3 4 Price per unit (R) 10 10 10 10 10 10 c) d) 38022222 Total revenue Total profit (R) -10 -9 -5 -6 Marginal cost (R) . 9 6 8 10 13 Average variable cost (R) 9,00 7,50 7,67 8,25 9,20 This perfectly competitive firm will produce a) 3 bulbs, since losses are minimised. b) 4 bulbs, but it will consider shutting down in the short run. 4 bulbs, since at this production level it earns normal profit. 4 bulbs and will stay in operation.