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Why is price per unit equal to the average revenue and marginal revenue of a firm under perfect competition?
Under Perfect competition , Marginal revenue is constant and equal to the prevailing market price, since all units are sold at the same price. Thus in pure competition MR = AR = P.
Why do the demand and marginal revenue curves coincide?
Because in Pure Competition, Demand equals Price, and Price equals Marginal Revenue;hence, Demand equals Marginal revenue.
Why is it that firms can earn profits in the long run in monopoly and oligopoly but not in monopolistic competition and perfect competition?
Because monopolistically competitive firms have an optimal production allocation at monopoly values: marginal revenue = marginal cost, marking-up to the demand function. When competition is not perfect, marginal revenue does not equal demand but is always below it on a Cartesian plane, so the optimal production value of a monopolistically competitive firm is both less and at a higher price than a perfectly competitive one.
Is marginal revenue the same at all levels of output in a perfect competition?
see the second & third link of this website: all-investing-money.co.cchope you get answer; good luck !
Can marginal revenue ever be negative?
no,marginal revenue cannot be ever negative.this condition is only applies when price effect is on the revenue is greater than output effect
Why is price per unit equal to the average revenue and marginal revenue of a firm under perfect competition?
Under Perfect competition , Marginal revenue is constant and equal to the prevailing market price, since all units are sold at the same price. Thus in pure competition MR = AR = P.
Why do the demand and marginal revenue curves coincide?
Because in Pure Competition, Demand equals Price, and Price equals Marginal Revenue;hence, Demand equals Marginal revenue.
Why is it that firms can earn profits in the long run in monopoly and oligopoly but not in monopolistic competition and perfect competition?
Because monopolistically competitive firms have an optimal production allocation at monopoly values: marginal revenue = marginal cost, marking-up to the demand function. When competition is not perfect, marginal revenue does not equal demand but is always below it on a Cartesian plane, so the optimal production value of a monopolistically competitive firm is both less and at a higher price than a perfectly competitive one.
Is marginal revenue the same at all levels of output in a perfect competition?
see the second & third link of this website: all-investing-money.co.cchope you get answer; good luck !
Is -5 marginal revenue positive negative or zero?
A wild guess is that it is negative.
Can marginal revenue ever be negative?
no,marginal revenue cannot be ever negative.this condition is only applies when price effect is on the revenue is greater than output effect
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
How are price and output determined under pure or perfect competition?
Price is determined by the market and Output level is the only choice the firm has to make. Since firms want to maximise profit, it will produce at a level where Marginal Cost equals Marginal Revenue. This is the profit maximisation pointUnder the perfect competition sellers will reduce prices in order to sell more than their competitors.
How are price and output determined under pure and perfect competition?
Price is determined by the market and Output level is the only choice the firm has to make. Since firms want to maximise profit, it will produce at a level where Marginal Cost equals Marginal Revenue. This is the profit maximisation pointUnder the perfect competition sellers will reduce prices in order to sell more than their competitors.
Why average revanue is equal to marginal revanue in imperfect competiton?
Average Revenue (AR) is equals to Marginal Revenue (MR) in Perfect competition (PC) not imperfect competition. AR can be derived from the formula= Total revenue(TR) / Quantity. Since TR = Price x Quantity, the formula now will be Price x Quantity/ Quantity and naturally, AR equals to Price. Marginal Revenue can be measured by the formula= Change in total revenue/ Change in quantity (which is 1). Since the change in total revenue will be equals to the price of the product, MR in this case will be the Price of the product. From here we can see that Price = MR = AR = Demand.
Why is the marginal revenue curve the same as its demand curve?
The marginal revenue curve describes the incremental change in revenue (that is, price*units sold). The MR is not always equivalent to its demand curve. The more perfect competition is, the closer demand approaches the MR. This is because, in perfect competition, firms sell at the MC = MR = P criterion. In the opposite case, monopoly, MR always lies under of demand, and firms achieve monopoly profits by choosing a production quantity where MC = MR and charging a price mark-up.
What is the distinction between marginal revenue product and marginal revenue?
I'm thinking that marginal revenue product is the marginal revenue on one product, and marginal revenue is the marginal revenue on the whole firm sales... I'm wondering the same thing but the above response is incorrect. both terms imply values on one item as indicated by the "marginal"
