Imagine you own a perfectly competitive firm. Calculate your company’s total revenue, average revenue, and marginal revenue for a year, using hypothetical numbers. Do not use examples or numbers from the text.
What will be an ideal response?
but should show a thorough understanding of how to calculate a firm’s total revenue, average revenue, and marginal revenue. For example, a firm might charge $8 for each unit it produces. During a year, it sell 100 units. As a result, the company makes a total revenue of $800 ($8 x 100 = $800). The average revenue would be $8 per unit ($800 ÷ 100 = $8). Marginal revenue would also be $8 because as the firm adds one additional unit of output, total revenue will always increase by the amount of the product price.
You might also like to view...
Which of the following statements about the characteristics of debt and equity is FALSE?
A) They can both be long-term financial instruments. B) They can both be short-term financial instruments. C) They both involve a claim on the issuer's income. D) They both enable a corporation to raise funds.
Which nation has experienced the lowest unemployment rates during the past two decades?
a. Canada b. France c. Japan d. Italy
Simon Kuznets argues that changes in quantities of labor and capital account for:
a. decrease in economic growth. b. one tenth of the increase in economic growth. c. all of the increase in economic growth. d. most of the inflation in our economy.
Marginal utility
A. is the usefulness a consumer derives from a certain good or service. B. is the utility a consumer derives from a certain good or service. C. increases as more of a good or service is consumed. D. is the additional utility derived from consuming one more unit of a good or service.