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Because in Pure Competition, Demand equals Price, and Price equals Marginal Revenue;hence, Demand equals Marginal revenue.
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When demand is perfectly elastic what happens to marginal revenue?
When Demand is perfectly elastic, Marginal Revenue is identical with price.
Relationship between Marginal revenue and Demand curve?
marginal revenue always lies behind the demand curve,and when demand increases marginal revenue also increases.demand curve is used to determine price of a commodity.
How to use the concept of price elasticity of demand to maximize revenue?
Price elasticity of demand is a way to determine marginal revenue. Optimal revenue and, more importantly, optimal profit will occur to the point when marginal revenue = marginal cost, or the price elasticity of demand < 1.
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
If marginal revenue product capital increases the demand or supply curve?
Demand.
When demand is perfectly elastic what happens to marginal revenue?
When Demand is perfectly elastic, Marginal Revenue is identical with price.
Relationship between Marginal revenue and Demand curve?
marginal revenue always lies behind the demand curve,and when demand increases marginal revenue also increases.demand curve is used to determine price of a commodity.
How to use the concept of price elasticity of demand to maximize revenue?
Price elasticity of demand is a way to determine marginal revenue. Optimal revenue and, more importantly, optimal profit will occur to the point when marginal revenue = marginal cost, or the price elasticity of demand < 1.
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
If marginal revenue product capital increases the demand or supply curve?
Demand.
Why is the demand curve the same as the marginal revenue curve for a perfectly competitive firm?
Because for a perfectly competetive firm since the demand curve is perfectly elastic even a slightest price change doesnt add any further demand..so there is no change in marinal revenue also.Since revenue is demand multiplied with cost of unit..the two curves are same.
If marginal revenue is less than average revenue will the demand curve be downward sloping?
This question reflects a fundamental misunderstanding of supply and demand. Marginal revenue and average revenue are related to a firm's cost function, and are thus connected to SUPPLY. They have nothing to do with a demand curve in classical economics, which is the marginal benefit to the CONSUMER of being in the market.
What is the condition of equilibrium for monopolist?
Marginal Revenue = Marginal Cost; mark-up price to the demand curve.
When a firm makes a profit by producing enough goods to meet demand without having leftover supply at what point is it?
When a firm makes a profit by producing enough goods to meet demand without having leftover supply the point of profit is where marginal revenue equals marginal cost.
When a firm's marginal revenue is zero what can be said about the elasticity of demand for the output of the firm A. Demand is inelastic. B. Demand is elastic. C. Demand is unit elastic.?
Demand is unit elastic.
Why does marginal revenue curve lie below the Demand curve?
Since Marginal revenue refers to the additional revenue earned by a monopolist by increasing the sale by 1 unit ( usually through lowering the price ), the additional revenue earned will always be less since there has been a drop in price.
Identify the characteristics of a perfectly competitive market and explain how the marginal revenue marginal cost average revenue average variable cost average total cost and price curves all interact?
Characteristics of Perfectly Competitive Market: Free entry / exit (no barriers to entry) Firms produce homogenous products There is perfect knowledge of the market Many Seller and Buyers Seller is a passive price taker Marginal Revenue Curve = Average Revenue = Price = Demand Curve for individual firm. The curve is constant Marginal Cost Curve intersects both Average Variable Cost and Average Total Cost curves at their minimum point Profit Maximisation output level is when MR = MC (find intersect point and draw line down to Q axis)
