1. Use the table below to answer the next question for a perfectly competitive f
ID: 1200415 • Letter: 1
Question
1. Use the table below to answer the next question for a perfectly competitive firm.
Output
Total Revenue
Total Cost
0
$ 0
$ 50
1
40
74
2
80
94
3
120
117
4
160
142
5
200
172
The market price of the product in the short run is
$40.
$80.
$120.
$160.
2. Which of the following is true under conditions of perfect competition?
there are differentiated products
the market demand curve is perfectly elastic
no single firm can influence the market price
each individual firm has the ability to set its own price
3.Which of the following is a reason why individual firms under perfect competition would not find it gainful to advertise their product?
Firms produce a homogeneous product.
The quantity of the product demanded is very large.
The market demand curve cannot be increased.
Firms do not make long-run profits.
Output
Total Revenue
Total Cost
0
$ 0
$ 50
1
40
74
2
80
94
3
120
117
4
160
142
5
200
172
Explanation / Answer
1. Total Revenue (TR)= Price*quantity
So, 40 = P*1
80 = P*2
120 = P*3
Hence Price = TR/Q = $40
2. no single firm can influence the market price
3. Firms produce a homogeneous product
If you don't understand anything then comment , I will reply with the required details.
And if you liked the answer then please review the same
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.