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# Determination of market structure

Use the following demand schedule to determine total revenue and marginal revenue for each possible level of sales:
Product Price Quality Demanded Total Revenue Marginal Revenue

\$2 0 \$-----------
2 1 ------------ ----------------
2 2 ----------- ------------------
2 3 ----------- ----------------
2 4 ----------- -----------------
2 5 ------------ -----------------

.a. What you could conclude about this structure of the industry in which this firm is operating?
Explain.
b. Graph the demand, total-revenue, and marginal revenue curves for this firm.
c. Why do the demand and marginal-revenue curves coincide?
d. "Marginal revenue is the change in total revenue associated with additional units of output"
Explain verbally and graphically, using the data in the table.

#### Solution Preview

Total revenue, top to bottom: 0; \$2; \$4; \$6; \$8; \$10. Marginal revenue, top to bottom: \$2, throughout.

(a) The industry is purely competitive--this firm is a ...

#### Solution Summary

Determination of market structure based on total and marginal revenues.

\$2.19