3. Explain why price is equal to marginal revenue in pure competition but not in a monopoly. Include in your explanation why the marginal revenue curve is steeper than the demand curve for a single price monopolist?

Answers

Answer 1

Answer:

In a perfect competition market, the Marginal Revenue is equal to the price (MR = P), and for monopolist, the marginal revenue is not equal to the price, because changes in quantity of output affects the price.

Why is price equal to Marginal revenue in pure competition?

Marginal revenue (MR) is an increase in the total revenue resulting from an increase in one unit of product. As the price always remains constant in perfect competition, increasing the total revenue from the production of 1 additional unit will be equal to the price.

Therefore, Price = Marginal Revenue (P = MR) in perfect competition.

In a monopoly the demand curve is the same as the firm's demand curve, in that the industry demand curve drops downwards. One owner can set the price or quantity and not both.

If one is determined the price of the other will be determined by the demand function. Increasing the monopolist's profit also requires that the marginal cost should be equal to the marginal revenue as if it were in perfect competition.

The Marginal revenue curve is steeper than the demand curve because a straight line is market demand. The firm will have to lower the Product Price if it wants to sell more of its product a unit of sale sold average revenue equal to the Price.

So the AR curve of AR monopolist and perfect competition MR and AR are both same.

Thus, this is the reason why the marginal revenue curve is steeper than the demand curve in the case of a monopolist.

To learn more about Marginal revenue, refer to the link:

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Answer 2

Answer:

The answer is in a perfect competition profit is maximized when marginal cost equal marginal revenue and price is equal to average revenue and marginal revenue, while in monopolist profit is maximized when marginal cost is equal to marginal revenue.

Explanation:

The firm in a perfectly competitive market is a price taker,the price in the market is determined by the market forces of demand and supply. The firm has to sell their product at the ruling market price.The demand curve facing the firm in perfectly competitive market is horizontal or perfectly elastic, profit is therefore maximized when the marginal cost is equal to average revenue and marginal revenue. The firm in the market operate at the output level in which the price and marginal revenue is equal to marginal cost. Whatever prices that change the market demand or supply will change the demand curve faced by the firm.The firm cannot do anything to this than to accept the market price and the demand curve.

In a monopoly the demand curve is identical to the demand curve of the firm, because industry demand curve is downward sloping.The monopolist can either set the price or quantity not the two.when one is determined the value of the other will be determined by the demand function. The profit maximization of the monopolist also requires that marginal cost must be equal to marginal revenue just like in the case of perfect completion.when the monopolist equates MR and MC the monopolist determines its output and the market price for the product. The revenue curve is steeper than the demand curve,because the straight line is the market demand. The firm will have to reduce The price of the product if they want to sell more of their product the unit of the product sold is the AR which is equal to the price.Therefore the AR curve of the monopolist and the perfect competition MR and AR are both identical that informed the reason why the marginal revenue curve is steeper than the demand curve for a single price monopolist.

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Nolan Company's cash account shows a $29,193 debit balance and its bank statement shows $28,152 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $2,801. The June 30 bank statement lists $32 in bank service charges; the company has not yet recorded the cost of these services. In reviewing the bank statement, a $80 check written by the company was mistakenly recorded in the company’s books as $89. June 30 cash receipts of $3,853 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement. The bank statement included a $34 credit for interest earned on the company’s cash in the bank. The company has not yet recorded interest earned. Prepare a bank reconciliation using the above information.

Answers

Answer:

Explanation:

Bank reconciliation is practice of reconciling the bank account balance in a company's book to the balance reported by the bank i order to discover and correct any discrepancy

Workings

Bank reconciliation for Nolan for the month of June

Bank statement balance 28,152

Add bank deposit 3,853 3853

32,005

Less outstanding check (2801) (2801)

29,204

Cash book balance 29,193

Add back error in check (89-80) 9

Interest Earned 34 43

29,236

Less bank charges 32 (32)

29,204

Kevin invests $800 in an account that earns 5% simple interest. Jeremy invests $600 in an account earning 6%interest compounded annually. Who will have earned more interest after 3 years? How much more?
A. Kevin will have earned $5.39 more than Jeremy after 3 years.
B. Jeremy will have earned $5.39 more than Kevin after 3 years.
C. Kevin will have earned $18.10 more than Jeremy after 3 years.
D. Jeremy will have earned $18.10 more than Kevin after 3 years.

Answers

Answer:

Explanation:

Unlike supportive leadership, participative leadership is used when _____. a. workers have an external locus of control b. the formal authority system is clear c. workers lack experience d. tasks are complex

Answers

Unlike supportive leadership, participativeleadership is used when the formal authority system is clear.

What is participative leadership?

Participative leadership is based on getting engagement and involvement of employees in the decision-making process. This style enables employees to feel motivated and belonged to the organization.

Therefore, this is usually incorporated in big organizations where there are more layers of hierarchy, which calls for collaboration of employees as all role and authority is clearly defined.

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Answer:

Explanation:

To fund your dream vacation, you plan to save $1,475 per year for the next 15 years starting one year from now. If you can earn an interest rate of 6.25%, how much will you have saved for your vacation?

Answers

Answer:

FV= $34,993.05

Explanation:

Giving the following information:

Annual deposit= $1,475

Number of periods= 15 years

Interest rate= 6.25%

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {1,475*[(1.0625^15) - 1]} / 0.0625

FV= $34,993.05

Gus buys cupcakes every saturday morning. when he walks into the bakery, he always orders by saying, "give me $10 worth of cupcakes." what does this tell you about gus's elasticity of demand for cupcakes?

Answers

Elasticity of demand measures the responsiveness of quantity demanded to a change in the price of the good.

a. Perfectly elastic - The good is perfectly elastic when the consumer is ready to buy any quantity at a fixed price.

b. Perfectly inelastic- The good is perfectly inelastic when the change in the price of the good has not effect on its demand, that is when quantity demanded is same at whatever price.

So, because here Gus is ready to buy any units of cupcakes at a fixed price of $10, the demand for cupcakes should be perfectly elastic.

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Answers

The correct answer is:

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