Problem: Use the following demand schedule to determine total revenue and marginal revenue for each possible level of sales:
Product Price Quality Demanded Total Revenue Marginal Revenue
$2 0 $-----------
2 1 ------------ ----------------
2 2 ----------- ------------------
2 3 ----------- ----------------
2 4 ----------- -----------------
2 5 ------------ -----------------
Question 1: What you could conclude about this structure of the industry in which this firm is operating? Explain.
Question 2: Graph the demand, total-revenue, and marginal revenue curves for this firm.
Question 3: Why do the demand and marginal-revenue curves coincide?
Question 4: "Marginal revenue is the change in total revenue associated with additional units of output" Explain verbally and graphically, using the data in the table.