The following graph illustrates the market for small moving trucks in Eugene, OR, during Oregon's fall move-in week.PRICE (Dollars per small truck)1009080703020210DDDemand101232 3 4 5QUANTITY (Hundreds of small trucks)7Suppose that Zoomba is one of over a dozen competitive firms in the Eugene area that offers moving truck rentals.Based on the preceding graph showing the weekly market demand and supply curves, the price Zoomba must take as given is SSupplyFill in the price and the total, marginal, and average revenue Zoomba ears when it rents 0, 1, 2, or 3 trucks during move-in week.Quantity PriceTotal Revenue Marginal Revenue Average Revenue(Trucks) (Dollars per truck) (Dollars) (Dollars)(Dollars per truck)Average revenue curveO Marginal revenue curveMarginal cost curveO Supply curve100The demand curve faced by Zoomba is identical to which of its other curves? Check all that apply.

The per unit revenue by selling goods is AR(average revenue). The change in revenue due to a change in quantity is known as MR(marginal revenue). The revenue which the producer earns by selling his goods and services is known as total revenue(TR).(A) An equilibrium in the market occurred where the supply curve and demand curve of a good is equal.In the given diagram, the demand and supply curves is intersecting at a quantity equal to 5. The price at which the supply and demand curves is intersecting is the equilibrium price. So, the supply and demand curve is intersecting at price equal to 50.Thus, the price given to person Z is $50.(B) Following formulas will be used to calculate MR ,TR and AR; TR(Total Revenue)=P(price)×Q(quantity)MR(Marginal revenue)=Change in TRChange in QAR(Average revenue)=TRQ Q P TR MR AR 0 50 0 1 50 50 50 50 2 50 100 50 50 3 50 150 50 50 In the above schedule , only Q and TR is changing .(C)It can be seen in the above schedule that MR,AR and P is constant. It is true in the case of perfect competition. There are lot of sellers in PC(perfect competition) due to which no seller can affect the market. The price is decided by the supply and demand curve of the industry. So, the price is given to the sellers in PC(perfect competition). Since, sellers in PC( perfect competition ) are price takers .Hence, the price is constant. If price is constant , then AR and MR will be automatically constant. Thus, alternative A and B is true. Alternative C and D are not true because MC( marginal cost ) is decided on the basis of cost of production. It may be or may not be constant. Supply curve is the MC curve .So, it will not necessary be constant.(A) The equilibrium price is 50 (B)Only TR and Q ae changing, rest are constant. (C)Due to constant price , average revenue(AR) and marginal revenue (Marginal revenue) are constant . Thus , alternative A and B are true .

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The following graph illustrates the market for small moving trucks in Eugene, OR, during Oregon's fall move-in week. PRICE (Dollars per small truck) 100 90 NO 70 30 10 0 D 0 1 Demand 2 1 Suppose that Zoomba is one of over a dozen competitive firms in the Eugene area that offers moving truck rentals. 3 6 QUANTITY (Hundreds of small trucks) Based on the preceding graph showing the weekly market demand and supply curves, the price Zoomba must take as given is S Fill in the price and the total, marginal, and average revenue Zoomba ears when it rents 0, 1, 2, or 3 trucks during move-in week. Quantity Price Total Revenue Marginal Revenue Average Revenue (Trucks) (Dollars per truck) (Dollars) (Dollars per truck) (Dollars) Supply 9 10 Marginal cost curve O Supply curve 0 The demand curve faced by Zoomba is identical to which of its other curves? Check all that apply. Average revenue curve O Marginal revenue curve AAA

The following graph illustrates the market for small moving trucks in Eugene, OR, during Oregon's fall move-in week. PRICE (Dollars per small truck) 100 90 NO 70 30 10 0 D 0 1 Demand 2 1 Suppose that Zoomba is one of over a dozen competitive firms in the Eugene area that offers moving truck rentals. 3 6 QUANTITY (Hundreds of small trucks) Based on the preceding graph showing the weekly market demand and supply curves, the price Zoomba must take as given is S Fill in the price and the total, marginal, and average revenue Zoomba ears when it rents 0, 1, 2, or 3 trucks during move-in week. Quantity Price Total Revenue Marginal Revenue Average Revenue (Trucks) (Dollars per truck) (Dollars) (Dollars per truck) (Dollars) Supply 9 10 Marginal cost curve O Supply curve 0 The demand curve faced by Zoomba is identical to which of its other curves? Check all that apply. Average revenue curve O Marginal revenue curve AAA

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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