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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?
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.