Question

Consider a perfectly competitive market described by the demand function P = 75 - 0.45Q and supply function P = 15 + 0.3Q. If the market is in equilibrium, then an individual firm's total revenue (TR), average revenue (AR) and marginal revenue (MR) functions are:

Answer 1

In a perfectly competitive market, total revenue (TR), average revenue (AR), and marginal revenue (MR) of an individual firm can be calculated using the demand and supply functions.

Step-by-step explanation:

In a perfectly competitive market, an individual firm's total revenue (TR) is calculated by multiplying the quantity produced by the price. The average revenue (AR) is equal to the price, since in a perfectly competitive market, the firm can sell any number of units at the same price. Marginal revenue (MR) is also equal to the price.

To calculate total revenue, average revenue, and marginal revenue, we need to use the demand and supply functions. Given the demand function P = 75 - 0.45Q and supply function P = 15 + 0.3Q, we can substitute the quantity (Q) from the demand function into the price equation to calculate total revenue, average revenue, and marginal revenue.