Answer to Question #241708 in Microeconomics for Kimberly

Question

From the figures given below;

OUTPUT(UNITS) TOTAL REVENUE

50 750

60 840

70 910

80 960

90 990

100 1000

You are required to:

a) Calculate the average revenue [3 marks]

b) Calculate the marginal revenue [2 marks]

c) Draw the average revenue curve [2 marks]

d) Determine the market structure [1 mark]

e) Mention two features of the market structure in (d) [2 marks

Answer 1

Solution:

a.). Average revenue = $\frac{Total \;Revenue}{Output}$

b.). Marginal revenue = $\frac{\triangle Total \;Revenue}{\triangle Output}$

This has been calculated as per the below table:

 

 

d.). The market structure is a monopoly market.

 

e.). A monopoly market structure exists when an individual or a firm is the only supplier, producer, or seller of a particular product in the market.

The two features of a monopoly include the following:

1.). Characterized by a single seller selling a unique product.

2.). Price discrimination.