I dont get why the answer is A and not E??
Homework Answers
When price of a good decreases, it impacts the total revenue through price effect and the output effect.
Price effect leads to loss in revenue while output effect leads to gain in revenue.
However, magnitude of price effect and the output effect determine whether total revenue will increase or decrease.
If the magnitude of price effect is greater than the magnitude of output effect then revenue lost will be greater than the revenue gained and thus total revenue will decrease and marginal revenue will be negative.
On the other hand, if the magnitude of price effect is less than the magnitude of output effect then revenue lost will be smaller than the revenue gained and thus total revenue will increase and marginal revenue will be positive.
Thus,
When marginal revenue is negative, the lost revenue associated with the price effect outweigh the revenue gains created by the output effect.
Hence, the correct answer is the option (A).
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I dont get why the answer is A and not E?? 1. When marginal revenue is negative, the: A) lost revenues associated with...
Just in case, if you click on the "NEXT" button to go to the next question...
Just in case, if you click on the "NEXT" button to go to the next question and it does not work, you can manually select the next question on the side bar. Question 38 2 pts When marginal revenue is positive, the firm is maximizing revenues. O output effect is relatively small compared to the price effect. lost revenues associated with the price effect are outweighed by the revenue gains created by the output effect. firm cannot be maximizing profits....
If a firm's marginal cost exceeds its marginal revenue, then a. profit is negative b. the...
If a firm's marginal cost exceeds its marginal revenue, then a. profit is negative b. the firm should shut down c. cutting back production will increase profits d. the firm should reduce its per-unit cost by increasing its output
Total Revenue Marginal Revenue 1) For the following firm in a competitive market, COSTS REVENUES Quantity...
Total Revenue Marginal Revenue 1) For the following firm in a competitive market, COSTS REVENUES Quantity Total Marginal Quantity Produced Cost Cost Demanded Price SO $80 $50 $80 $102 $80 $157 $80 $217 SSO $285 $80 $365 $80 $462 $80 8 $582 IS $80 a) Fill the column for marginal cost, total revenue and marginal revenue. b) What is interesting about the numbers you find for marginal revenue. c) Based on profit maximization rule that you learned in Chapter 14...
I dont know how to get this answer. 20. Consider the market for paper. If revenue...
I dont know how to get this answer.
20. Consider the market for paper. If revenue is maximized at 500 boxes of paper, when is price elasticity of demand inelastic? a. 500 boxes of paper b.) 600 boxes of paper c. 200 boxes of paper d. None of the above.
above figure, when the firm produces output corresponding to point c the firm's marginal co A)...
above figure, when the firm produces output corresponding to point c the firm's marginal co A) equals its marginal revenue B) exceeds its marginal revenue C) equals its average revenue. D) is less than its marginal revenue. E) more information would be needed to answer the question 25) At a firm's break-even point, its A) marginal revenue exceeds its marginal cost. 13) marginal revenue equals its average variable cost. C) total revenue equals its total opportunity cost. D) also its...
Table 2 Shows Media Cable’s demand table, total revenue, and marginal revenue at each price. Why,...
Table 2 Shows Media Cable’s demand table, total revenue, and marginal revenue at each price. Why, at any price lower than $130, is the marginal revenue from an additional sale less than the price? Table 2 Price Amount Demanded Total Revenue Marginal Revenue $160 0 $0 n/a $130 90 $11,700 $130.00 $100 200 $20,000 $75.45 $80 350 $28,000 $53.33 $40 600 $24,000 -$16.00 $0 850 $0 -$96 .00 Question 5 options: a) Lowering the price means that Media Cable lowers...
Please help me i get lost around E. I got Eq=220 Ep=19. I dont know what...
Please help me i get lost around E. I got Eq=220 Ep=19. I dont
know what im doing wrong
180 22. (16 points) A market's demand and supply functions are as follows: Qd = 600 - 20P, and Qs = 10p - 30. a. (4 points) Determine the equilibrium price and quantity Coo-lop-lop-30 600 20021) = 600 = 30p- 30 - tro t30 180=Ep 1800E - 6302302 121= EQ 21 b. (4 points) Graph the inverse demand and supply curves....
15. When marginal cost is less than average total cost, a. marginal cost must be falling....
15. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. 16. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited d. Each firm chooses an output level that maximizes profits. 17. If a...
The table below shows the marginal revenue and costs for a monopolist. Demand, Costs, and Revenues...
The table below shows the marginal revenue and costs for a monopolist. Demand, Costs, and Revenues Price Quantity Marginal Revenue (dollars) Demanded (dollars) $85 50 $85 79 150 76 250 64 67 350 521 61 450 40 55 550 1 28 73 Marginal Cost (dollars) $25 85 64 61 1 67 77 1 Average Total Cost (dollars) $139.00 103.30 87.50 80.00 77.00 77.00 Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure...
Exhibit 8-9 A firm's cost and marginal revenue curves In Exhibit 8-9, product price in this...
Exhibit 8-9 A firm's cost and marginal revenue curves In Exhibit 8-9, product price in this market is fixed at $14. This firm is currently operating where MR = MC. What do you advise this firm to do? Group of answer choices A. This firm should shut down. B. This firm could increase profits by increasing output. C. This firm could increase profits by decreasing output. D. This firm should continue to operate at its current output. E. This firm...
Just in case, if you click on the "NEXT" button to go to the next question and it does not work, you can manually select the next question on the side bar. Question 38 2 pts When marginal revenue is positive, the firm is maximizing revenues. O output effect is relatively small compared to the price effect. lost revenues associated with the price effect are outweighed by the revenue gains created by the output effect. firm cannot be maximizing profits....
Total Revenue Marginal Revenue 1) For the following firm in a competitive market, COSTS REVENUES Quantity Total Marginal Quantity Produced Cost Cost Demanded Price SO $80 $50 $80 $102 $80 $157 $80 $217 SSO $285 $80 $365 $80 $462 $80 8 $582 IS $80 a) Fill the column for marginal cost, total revenue and marginal revenue. b) What is interesting about the numbers you find for marginal revenue. c) Based on profit maximization rule that you learned in Chapter 14...
I dont know how to get this answer.
20. Consider the market for paper. If revenue is maximized at 500 boxes of paper, when is price elasticity of demand inelastic? a. 500 boxes of paper b.) 600 boxes of paper c. 200 boxes of paper d. None of the above.
above figure, when the firm produces output corresponding to point c the firm's marginal co A) equals its marginal revenue B) exceeds its marginal revenue C) equals its average revenue. D) is less than its marginal revenue. E) more information would be needed to answer the question 25) At a firm's break-even point, its A) marginal revenue exceeds its marginal cost. 13) marginal revenue equals its average variable cost. C) total revenue equals its total opportunity cost. D) also its...
Please help me i get lost around E. I got Eq=220 Ep=19. I dont
know what im doing wrong
180 22. (16 points) A market's demand and supply functions are as follows: Qd = 600 - 20P, and Qs = 10p - 30. a. (4 points) Determine the equilibrium price and quantity Coo-lop-lop-30 600 20021) = 600 = 30p- 30 - tro t30 180=Ep 1800E - 6302302 121= EQ 21 b. (4 points) Graph the inverse demand and supply curves....
15. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. 16. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited d. Each firm chooses an output level that maximizes profits. 17. If a...
The table below shows the marginal revenue and costs for a monopolist. Demand, Costs, and Revenues Price Quantity Marginal Revenue (dollars) Demanded (dollars) $85 50 $85 79 150 76 250 64 67 350 521 61 450 40 55 550 1 28 73 Marginal Cost (dollars) $25 85 64 61 1 67 77 1 Average Total Cost (dollars) $139.00 103.30 87.50 80.00 77.00 77.00 Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure...
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