please help? The following graph shows the dally market for medium cardboard box
ID: 1191335 • Letter: P
Question
please help? The following graph shows the dally market for medium cardboard boxes in Philadelphia. Suppose that Falero is one of more than a hundred competitive firms in Philadelphia that produce such cardboard boxes. Based on the previous graph showing the daily market demand and supply curves, the price Falero must take as given is Fill in the price and the total, marginal, and average revenue Falero earns when it produces 0, 1, 2, or 3 boxes each day. The demand curve that Falero faces is identical to which of its other curves? Check all that apply.Explanation / Answer
According to given graph, market price is $10 per medium card board box.
A competitive firm acts as price taker.
In other words, a competitive firm has to accept the price as determined by the market.
Falero is a competitive firm. In other words, it operates in a competitive market and thus has to accept the price determined by market.
Market price in market for medium cardboard boxes is $10 per medium cardboard box.
So, the price Falero must take as given is $10 per medium cardboard box.
Following is the complete table –
Quantity
(boxes)
Price
($ per box)
Total revenue
($)
[Price*Quantity]
Marginal Revenue ($)
[MR = TRn – TRn-1]
Average revenue ($)
[AR = TR/Q]
0
10
0
-
-
1
10
10
10 – 0 = 10
10/1 = 10
2
10
20
20 – 10 = 10
20/2 = 10
3
10
30
30 – 20 = 10
30/3 = 10
In a competitive market, a competitive firm’s demand curve is identical to its average revenue curve and marginal revenue curve.
Being a competitive firm, Falero’s demand curve will be identical to its average revenue curve and marginal revenue curve.
Quantity
(boxes)
Price
($ per box)
Total revenue
($)
[Price*Quantity]
Marginal Revenue ($)
[MR = TRn – TRn-1]
Average revenue ($)
[AR = TR/Q]
0
10
0
-
-
1
10
10
10 – 0 = 10
10/1 = 10
2
10
20
20 – 10 = 10
20/2 = 10
3
10
30
30 – 20 = 10
30/3 = 10
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