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shtirl [24]
3 years ago
14

3. Explain why price is equal to marginal revenue in pure competition but not in a monopoly. Include in your explanation why the

marginal revenue curve is steeper than the demand curve for a single price monopolist?
Business
1 answer:
melisa1 [442]3 years ago
8 0

Answer:

The answer is in a perfect competition profit is maximized when marginal cost equal marginal revenue and price is equal to average revenue and marginal revenue, while in monopolist profit is maximized when marginal cost is equal to marginal revenue.

Explanation:

The firm in a perfectly competitive market is a price taker,the price in the market is determined by the market forces of demand and supply. The firm has to sell their product at the ruling market price.The demand curve facing the firm in perfectly competitive market is horizontal or perfectly elastic, profit is therefore maximized when the marginal cost is equal to average revenue and marginal revenue. The firm in the market operate at the output level in which the price and marginal revenue is equal to marginal cost. Whatever prices that change the market demand or supply will change the demand curve faced by the firm.The firm cannot do anything to this than to accept the market price and the demand curve.

In a monopoly the demand curve is identical to the demand curve of the firm, because industry demand curve is downward sloping.The monopolist can either set the price or quantity not the two.when one is determined the value of the other will be determined by the demand function. The profit maximization of the monopolist also requires that marginal cost must be equal to marginal revenue just like in the case of perfect completion.when the monopolist equates MR and MC the monopolist determines its output and the market price for the product. The revenue curve is steeper than the demand curve,because the straight line is the market demand. The firm will have to reduce The price of the product if they want to sell more of their product the unit of the product sold is the AR which is equal to the price.Therefore the AR curve of the monopolist and the perfect competition MR and AR are both identical that informed the reason why the marginal revenue curve is steeper than the demand curve for a single price monopolist.

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Answer:

Family. or relationships. spending time with them

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​DeShawn's Detailing is a service that details cars at the​ customers' homes or places of work.​ DeShawn's cost for a basic deta
tensa zangetsu [6.8K]

Answer:

DeShawn not take offer engine detailing service

Explanation:

given data

cost = $40

charges = $75

total price = $90

additional charges = $20

to find out

Should DeShawn continue offer

solution

we know here De shawn marginal benefit is

marginal benefit = total price - charges

marginal benefit = 90 - 75

marginal benefit = $15

and

we have given additional charges is $20

so

we see marginal cost here less than the marginal revenue

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8 0
3 years ago
Suppose the price of a tie rises from $45 to $55. using the midpoint method, what is the percentage change in price?
Vinvika [58]
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4 0
3 years ago
Hardin Company received $120,000 in cash and a used computer with a fair value of $360,000 from Page Corporation for Hardin Comp
san4es73 [151]

Answer:

$30,000 and $360,000

Explanation:

The computation of the gain on the exchange is shown below:

= Cash received + fair value of the computer  -  undepreciated cost of existing computer

= $120,000 + $360,000 - $450,000

= $30,000

The amount of the computer which is recorded will equal to the fair value of the computer i.e $360,000

For computing the gain we simply added the fair value and deduct the undepreciated cost of an existing computer in the cash received amount so that the accurate amount can come.  

All other information which is given is not relevant. Hence, ignored it

3 0
3 years ago
Within the relevant range of activity ______. variable costs do not change in total, only per unit fixed costs remain constant i
Vlad1618 [11]

Answer:

False

Explanation:

Within the relevant range of activities, total fixed costs remain constant and fixed costs per unit decrease as total output increases. Total variable costs vary depending on total output, but variable costs per unit should remain constant.

On a long term basis, all costs are variable, that is why it is important to consider the range of activities, i.e. output levels.

6 0
3 years ago
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