Consider a perfectly competitive market described by the supply function P = 10 + 0.2Q and demand function P = 60 - 0.3Q. If the market is in equilibrium, then an individual firms total revenue (TR), average revenue (AR) and marginal revenue (MR) functions are:

TR = 26Q, AR = 26, and MR = 26

TR = 30Q, AR = 30, and MR = 30

TR = 35Q, AR = 35, and MR = 35

TR = 60 - 0.3Q, AR = 60 - 0.6Q, and MR = 60 - 0.3Q

TR = 60Q - 0.3Q2, AR = 60 - 0.3Q, and MR = 60 - 0.6Q

Question

Business

Joe Marshall

7 March, 08:16

Consider a perfectly competitive market described by the supply function P = 10 + 0.2Q and demand function P = 60 - 0.3Q. If the market is in equilibrium, then an individual firms total revenue (TR), average revenue (AR) and marginal revenue (MR) functions are:

TR = 26Q, AR = 26, and MR = 26

TR = 30Q, AR = 30, and MR = 30

TR = 35Q, AR = 35, and MR = 35

TR = 60 - 0.3Q, AR = 60 - 0.6Q, and MR = 60 - 0.3Q

TR = 60Q - 0.3Q2, AR = 60 - 0.3Q, and MR = 60 - 0.6Q

+1

Answers (1)

Know the Answer?

Leia Khan · Answer 1

Market equilibrium happens when supply is equal to demand

supply: P = 10 + 0.2Q

demand: P = 60 - 0.3Q

10 + 0.2Q = 60 - 0.3Q

0.2Q + 0.3Q = 60 + 10

0.5Q = 70

Q = 70/0.5

Q = 140