Asked by
sloane fischer
on Nov 27, 2024
Verified
Suppose that Joe sells pork in a purely competitive market. The market price of pork is $3 per pound. Joe's marginal revenue from selling the 12th pound of pork would be
A) $3.
B) $36.
C) 12 lbs.
D) $12.
Marginal Revenue
The increment in revenue realized from the sale of an additional unit of a product.
Market Price
The current price at which a good or service can be bought or sold in an open and competitive market.
Purely Competitive Market
A market structure characterized by a large number of buyers and sellers, homogeneous products, and free entry and exit, leading to price taking behavior.
- Evaluate the importance of marginal revenue and how it correlates with price in a purely competitive enterprise.
- Detail the linkage between average revenue, total revenue, and the mechanism of pricing in scenarios of absolute competition.
Verified Answer
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Learning Objectives
- Evaluate the importance of marginal revenue and how it correlates with price in a purely competitive enterprise.
- Detail the linkage between average revenue, total revenue, and the mechanism of pricing in scenarios of absolute competition.