2. The demand curve facing a competitive firm The following graph shows the dail

Question

2. The demand curve facing a competitive firm The following graph shows the daily market for medium cardboard boxes in Denver 20 Demand 18 Supply 16 14 12 0_ 0 1 2 3 45 6 7 89 10 QUANTITY (Millions of mecium boxes) Suppose that Vesoro is one of more than a hundred competitive firms in Denver that produce such cardboard boxes Based on the preceding graph showing the daily market demand and supply curves, the price Vesoro must take as given is $ Fill in the price and the total, marginal, and average revenue Vesoro earns when it produces 0, 1, 2, or 3 boxes each day Quantity Price (Boxes) (Dollars per box) (Dollars) Total Revenue Marginal Revenue Average Revenue Dollars per box) Dollars) 0 2 The demand curve that Vesoro faces is identical to which of its other curves? Check all that apply Marginal cost curve Marginal revenue curve Supply curve Average revenue curve

Explanation / Answer

The price Vesoro must take as given = $10 per box (where Demand = Supply)

TR = P x Q

MR (nth unit) = TR (n units) - TR ((n-1) units)

AR = TR/Q

Correct options:

- Marginal revenue curve

- Average revenue curve

Q P ($) TR ($) MR ($) AR ($) 0 10 0 1 10 10 10 10 2 10 20 10 10 3 10 30 10 10

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