Question

Fill in the price and the total, marginal, and average revenue Talero earns when it produces 0, 1, 2, or 3 boxes each day. 

The demand curve that Talero faces is identical to which of its other curves? Check all that apply. 

• Marginal revenue curve 

• Marginal cost curve 

• Supply curve 

• Average revenue curve

The following graph shows the daily market for small cardboard boxes in Houston. 

Suppose that Talero is one of more than a hundred competitive firms in Houston that produce such cardboard boxes. 

Based on the preceding graph showing the daily market demand and supply curves, the price Talero must take as given is _______ .

Answer 1

Answer : For multiple choice question: Options A and D are correct.

Here for Talero the price is equal to marginal revenue and average revenue at each quantity level. This means that at each quantity level Price = Marginal revenue = Average revenue = $5. Hence for Talero the demand curve is equal to the marginal revenue curve and average revenue curve. This means that for Talero, Demand curve = Marginal revenue curve = Average revenue curve. Therefore, options A and D are correct.