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
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
D 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
-MR
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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