Question

question use the table below to determine the marginal revenue (mr) and price (p) for company x selling a product in a market under perfect competition. company x total revenue quantity (q) total revenue 25 $300 50 $600 75 $900 100 $1200 provide your answer below: p = $, mr = $

Explanation:

Step1: Recall the formula for price in perfect - competition

In perfect competition, $P=\frac{TR}{Q}$. For the first row, when $Q = 25$ and $TR=300$, $P=\frac{300}{25}=12$. Since in perfect competition, price is constant, $P = 12$ for all levels of output.

Step2: Recall the formula for marginal revenue

The formula for marginal revenue is $MR=\frac{\Delta TR}{\Delta Q}$.
For $Q$ changing from 25 to 50: $\Delta Q=50 - 25=25$, $\Delta TR = 600 - 300=300$, so $MR=\frac{300}{25}=12$.
For $Q$ changing from 50 to 75: $\Delta Q=75 - 50 = 25$, $\Delta TR=900 - 600 = 300$, so $MR=\frac{300}{25}=12$.
For $Q$ changing from 75 to 100: $\Delta Q=100 - 75=25$, $\Delta TR=1200 - 900 = 300$, so $MR=\frac{300}{25}=12$. In perfect competition, $MR = P$.

Answer:

$P = 12$, $MR = 12$