Unit 6 a1 cf_marginal_cost_revenue_assignment.doc - Saundra...

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Saundra LouisMarginal Cost, Revenue, and Pure CompetitionNovember 18, 2018Marginal Cost, Revenue, and Pure CompetitionAssignment WorksheetDirectionsThis assignment deals with the recognition and application of pure competition cost andrevenue information that is graphically presented. Use the graph below to answer the followingquestions.Microeconomic Problem1.How do you know that the firm represented in the graph above is a purely competitivefirm?In perfect competition, marginal revenue equals price… and as we know fromsection 15.1, perfectively competitive firms are Price Takers…That is… they cannotinfluence the price of a product and must take what the market gives them for eachproduct they sell.Thus, it is a constant price and results in a horizontal line which willalso be our marginal revenue curve…Thus price equals marginal revenue.

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Term
Spring
Professor
Dr Beaver
Tags
Economics, Microeconomics, Saundra Louis

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