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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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"Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic pro
iris [78.8K]

Answer: is correct

Explanation: Tariff refers to the tax imposed on import and export activities. These are a type of trade restrictions that are made to regulate the domestic market of the country.

The tariff imposed on export will increase the price of the exported goods in the domestic market. Thus a majority population in the country will not purchase it and the domestic producers will benefit from this situation. In such a case, the domestic producers will make unreasonable profits from domestic consumers.

3 0
3 years ago
Which pricing tactic calls for offering three similar products, one that is lower priced and less attractive and two that are co
netineya [11]

Decoy pricing tactic calls for offering three similar products, one that is lower priced and less attractive and two that are comparable but more expensive.

<h3><u></u></h3><h3><u>What is decoy pricing?</u></h3>

A price strategy called decoy pricing aims to "push" customers to make a decision. Customers sometimes have to choose between products with varying costs and features while making purchases. And when a business seeks to increase sales of a certain product, it frequently chooses what is known as a decoy pricing structure to sway the consumer's choice. In this instance, the "decoy" is either a product with a slightly cheaper price but much worse quality, or a product with a significantly higher price but slightly greater quality.

The attraction effect and the compromise effect are the two distinct effects on which the decoy pricing strategy is predicated.

<u></u>

Learn more about pricing tactics with the help of the given link:

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8 0
2 years ago
A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could us
Sergio [31]

Answer:

For both 10,000 units and 20,000 units, the best alternative is Vendor B

Explanation:

Using the information provided in the question, we can write the following:

Annual Volume of 10,000 units

Internal Alternative 1

Variable costs = 170,000 (we multiply the variable cost per unit by total units)

Fixed costs = 20,000

Total costs = 370,000

Internal Alternative 2

Variable costs = 140,000

Fixed costs = 240,000

Total costs = 380,000

Vendor A

Total cost = 200,000 (we simply multiply the price by the quantity)

Vendor B

Total cost = 180,000

Vendor C

Total cost = 190,000

The cheapest option is Vendor B

Now for the 20,000 units:

Internal Alternative 1

Variable costs = 340,000

Fixed costs = 200,000

Total costs = 540,000

Internal Alternative 2

Variable costs = 280,000

Fixed costs = 240,000

Total costs = 520,000

Vendor A

Total cost = 400,000

Vendor B

Total cost = 360,000

Vendor C

Total cost = 380,000

Therefore, Vendor B is once again, the cheapest alternative.

5 0
3 years ago
Which of the following statements is NOT true of a department in the merchandise classification scheme? it is the second level i
Eva8 [605]
The first one is true I think
7 0
3 years ago
a secured party who has control will prevail over a secured party who has only filed for these types of collateral:
marshall27 [118]

Deposit accounts, Investment Property, and Letter-of-credit Rights. Thus option (A) is correct

<h3>What is the investment?</h3>

Investment is the ceremonial of money to purchase an asset to attain an increase in value over a time period of time. Investment requires a sacrifice of some present quality, such as time, medium of exchange, or effort. In finance, the purpose of investing is to generate a return from the invested asset.

Whether or not there is a current obligation to be secured, a person who has the benefit of the security interest generated by or provided for under a security arrangement is known as a secured party under UCC law. when the secured party is in possession, a duty of care.] A secured party must take reasonable care to keep the collateral it has in its possession safe unless subsection (d) provides otherwise.

Therefore, Thus option(A) is correct

Learn more about investments here:

brainly.com/question/15353704

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5 0
1 year ago
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