A 21 lbsB $21C $84D $4 **Understanding Marginal Revenue in a Competitive Market****Scenario:**Suppose that Joe sells pork in a purely competitive market. The market price of pork is $4 per pound. Joe’s marginal revenue from selling the 21st pound of pork would be...**Analysis:**To compute Joe’s marginal revenue in a purely competitive market, we need to understand the relationship between price and marginal revenue in such a market setting. In a purely competitive market, the price set by the market is constant and equal to the marginal revenue (MR).Given:- Market price (P) = $4 per poundSince Joe is operating in a purely competitive market:- The marginal revenue (MR) from selling the additional unit, which is the 21st pound, is equal to the market price.**Conclusion:**- Joe’s marginal revenue from selling the 21st pound of pork would be $4.In purely competitive markets, businesses are price takers, meaning the price is determined by overall supply and demand in the market, and each additional unit sold increases revenue by the market price of the product.

A competitive market is characterized by a large number of buyers and sellers. Because of the higher…

Answered: Suppose that Joe sells pork in a purely…

Suppose that Joe sells pork in a purely competitive market. The market price of pork is $4 per pouund. Joes marginal revenue from selling the 21st pound of pork would be

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 10PA

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7. Notepads and pens can be considered to be complements. Woodchips are an input to notepads, and plastic is an input to pens. Assume markets for notepads, pens, woodchips and plastic, are all perfectly competitive. Suppose that the equilibrium price of notepads increases, and the equilibrium price of pens decrease. Which of the following could explain these changes? a) A decrease in the supply of plastic b) An increase in the demand for wood chips c) An increase in the demand for plastic d) An increase in the supply of plastic e) Either (b) or (d)
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