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Exploring Demand--SolvedOne of the three fundamental tasks of a firm is to sell
output. Economists discuss this part of the business
with a demand curve. The table below shows two demand curves
that represent two different markets. They could represent
two different firms, or a case in which one firm is selling
two different goods or services. In which of these markets
is the firm a price taker? Market for Widgets Marginal revenue is the additional revenue that a firm gets from selling one more unit of output. In the two tables below, fill in the marginal-revenue columns. (If you have problems, try to first compute the total revenue, and from that get marginal revenue.)
A demand curve is a boundary that limits sellers. What
will the demand curve for widgets shown above look like if
we draw it? A horizontal line The region in which the firm
is allowed by this demand curve is the area below/to the
left of the demand curve. |
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