What is the pricing structure in a perfect competitive market___________________
ID: 1200560 • Letter: W
Question
What is the pricing structure in a perfect competitive market_______________________
What is the pricing structure in a monopoly_______________________?
Profit is calculated as___________________________________
At what point does a firm maximize its profits?
In a competitive market price equals _________________________? Explain your answer
At what point does a firm breakeven?
Profits are zero at what point in a firm?
How is Total Revenue calculated? ____________________________________.
If the company produces nothing which of the costs is equal to zero? _______________________
The amount that total cost rises when the firm produces one additional unit is called? ______________________________________.
Explanation / Answer
IN A PERFECTLY COMPETITIVE MARKET IS WHERE THE MARGINAL REVENUE = MARGINAL COST.
PRICING STRUCTURE OF A MONOPOLY IS WHERE THE HIGH PRICE AND LOW QUANTITY.
PROFIT IS CALCULATED AS PRICE LESS AVERAGE COST * QUANTITY.
PROFIT MAXIMIZING IS AT THE POINT WHERE MARGINAL COST CURVE CUTS THE MARGINAL REVENUE CURVE FROM BELOW.
IN A COMPETITIVE MARKET THE PRICE EQUALS THE MARKET PRICE. ( BECAUSE THE FIRM IS A PRICE TAKER AND NOT A PRICE MAKER, IF IT TRIES TO INCREASE THE PRICE ALL THE CUSTOMER WILL MOVE AWAY FROM IT.)
A FIRM IS AT BREAKEVEN AT THE POINT WHERE TOTAL REVENUE IS EQUAL TO TOTAL COST.
AT BREAKEVEN POINT THE PROFIT IS ZERO.
TOTAL REVENUE IS CALCULATED AS QUANTITY * PRICE .
THE VARIABLE COSTS ARE ZERO AT THE LEVEL OF NO PRODUCTION.
THE AMOUNT THAT RISES THAT TOTAL COST WHEN THE FIRM PRODUCES ONE ADDITIONAL UNIT IS CALLED MARGINAL COST .
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