What do a firm’s Marginal Revenue (MR) and Demand curves look like in perfect competition? Draw...
- What do a firm’s Marginal Revenue (MR) and Demand curves look like in perfect competition? Draw them in a Quantity-Price/MR diagram (don’t forget to label the axes).
- Why do the MR and Demand curves look the way you draw? Briefly explain.
- Now add a Marginal Cost curve (MC) to the diagram you drew above. How is the profit-maximizing output in perfect competition determined? Mark this output as q* in the diagram.
- What is the price a firm in perfect competition will charge for its product? Is this price related to the output level of this particular firm? Why or why not?
Homework Answers
What do a firm’s Marginal Revenue (MR) and Demand curves look like in perfect competition?
Ans: it's horizontal.
Why do the MR and Demand curves look the way you draw? Briefly explain.
Ans: Perfectly competitive firms are price taker, so whatever the price decides by the market they have to sell on this price only.
MR is the extra revenue earn by firm with selling of extra unit so here it will also be same as one unit because there is same proce at any level of output. So MR curve and Demand curve will be same horizontal.
How is the profit-maximizing output in perfect competition determined?
Ans: profit maximising output is determined where MR equals to MC.
MR is the extra revenue generated by the firm with the selling of extra unit and MC is extara cost generate by the firm with producing extra unit. So if firm will produce when MR is less than MC than he will enjoy more cost than revenue and if he will produce where MR is greater than MC then he can not enjoy that extra revenue.
What is the price a firm in perfect competition will charge for its product?
Ans:
Firm will charge price as demand curve or as market price.
Is this price related to the output level of this particular firm? Why or why not?
Ans:
No!
Becouse at any level of output price will be same.
Add Answer to:
What do a firm’s Marginal Revenue (MR) and Demand curves look
like in perfect competition? Draw...
WHAT ARE TWO DIFFERENCES BETWEEN MONOPOLISTIC COMPETITION AND PERFECT COMPETITION?
WHAT ARE TWO DIFFERENCES BETWEEN MONOPOLISTIC COMPETITION AND PERFECT COMPETITION? ON THE GRAPH, DRAW THE AVERAGE TOTAL COST, DEMAND, MARGINAL COST. AND MARGINAL REVENUE CURVES FOR A MONOPOLISTICALLY COMPETITIVE FIRM SHOWING A PROFIT. BE SURE TO LABEL THE PROFIT MAXIMIZING PRICE AND QUANTITY.
Recall that in perfect competition a firm’s demand curve is a horizontal line drawn at the...
Recall that in perfect competition a firm’s demand curve is a
horizontal line drawn at the market price level and that P=MR. With
this in mind, based on the figure below, total costs are:
Group of answer choices
$720
$660
$576
$432
2.
Refer to the graph below. Total profit is:
Groupof answer choices
$243
$144
$288
$132
3.
Refer to the diagram below. Based on the information illustrated
in this graph, which of the following is an accurate
statement?...
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the...
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why...
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the...
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why...
draw a graph depicting the MR, MC and demand curves for the monopolist. label the profit-maximizing...
draw a graph depicting the MR, MC and demand curves for the monopolist. label the profit-maximizing quantity of output and the price the monopolist will charge
need help with all of them Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from...
need help with all of them
Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from selling an additional unit of output the revenue in excess of what can be earned in the next-best alternative the last dollar needed to make zero economic profit the extra revenue generated by a $1 change in price the last dollar needed to make maximum profit Question 7 (1 point) In which of the following situations should a profit-maximizing...
Describe why in perfect competition the market price of a good becomes the marginal revenue (MR)...
Describe why in perfect competition the market price of a good becomes the marginal revenue (MR) associated with a given individual firm producing and selling one more unit.
The graph below shows a monopolist's demand (D), marginal revenue (MR), marginal cost (MC), and average...
The graph below shows a monopolist's demand (D), marginal
revenue (MR), marginal cost (MC), and average total cost (ATC)
curves. Management wants to adjust the production output quantity
to maximize the firm's profits. What quantity should the firm aim
for?
Give your answer by dragging the Q line to a new position to mark
the quantity at which profit is as large as possible.
Price and cost ATC MC MR Quantity
Perfect Competition Competition Monopolistic Monopoly Oligopoly Goal of firmsMaximize Profit Rule...
how would you fill out this graph?
Perfect Competition Competition Monopolistic Monopoly Oligopoly Goal of firmsMaximize Profit Rule for maximizing profit MR-MC Can earn economic profits in the short run? Yes Can earn economic profits in the long run? Yes Price taker? Sometimes P2MC Sometimes Price & MC Produces welfare maximizing output? Number of firms? Few 3. (1 point) Consider a world where only blank t-shirts are produced. Draw hypothetical Demand faced by a firm, MR, MC, and ATC curves...
#5 75. The graphs below show the market demand and supply curves for a good in...
#5
75. The graphs below show the market demand and supply curves for a good in a perfectly competitive industry along with a representative firm's short-run average and marginal cost curves. a. Determine the equilibrium price (label Pe) and output (label Qe) in the market. b. Draw the firm's demand (label d) and marginal revenue (label MR) curve. c. Determine the profit maximizing output (label 4). Explain why this is the profit-maximizing output d. Is the firm earning a profit...
Recall that in perfect competition a firm’s demand curve is a
horizontal line drawn at the market price level and that P=MR. With
this in mind, based on the figure below, total costs are:
Group of answer choices
$720
$660
$576
$432
2.
Refer to the graph below. Total profit is:
Groupof answer choices
$243
$144
$288
$132
3.
Refer to the diagram below. Based on the information illustrated
in this graph, which of the following is an accurate
statement?...
need help with all of them
Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from selling an additional unit of output the revenue in excess of what can be earned in the next-best alternative the last dollar needed to make zero economic profit the extra revenue generated by a $1 change in price the last dollar needed to make maximum profit Question 7 (1 point) In which of the following situations should a profit-maximizing...
The graph below shows a monopolist's demand (D), marginal
revenue (MR), marginal cost (MC), and average total cost (ATC)
curves. Management wants to adjust the production output quantity
to maximize the firm's profits. What quantity should the firm aim
for?
Give your answer by dragging the Q line to a new position to mark
the quantity at which profit is as large as possible.
Price and cost ATC MC MR Quantity
how would you fill out this graph?
Perfect Competition Competition Monopolistic Monopoly Oligopoly Goal of firmsMaximize Profit Rule for maximizing profit MR-MC Can earn economic profits in the short run? Yes Can earn economic profits in the long run? Yes Price taker? Sometimes P2MC Sometimes Price & MC Produces welfare maximizing output? Number of firms? Few 3. (1 point) Consider a world where only blank t-shirts are produced. Draw hypothetical Demand faced by a firm, MR, MC, and ATC curves...
#5
75. The graphs below show the market demand and supply curves for a good in a perfectly competitive industry along with a representative firm's short-run average and marginal cost curves. a. Determine the equilibrium price (label Pe) and output (label Qe) in the market. b. Draw the firm's demand (label d) and marginal revenue (label MR) curve. c. Determine the profit maximizing output (label 4). Explain why this is the profit-maximizing output d. Is the firm earning a profit...
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