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2. The demand curve facing a competitive firm The following graph lllustrates the market for small moving trucks in Ovledo, FL, during UCF's fall move-in week. (?) Suppose that YouYeet is one of over a dozen competitive firms in the Oviedo area that offers moving truck rentais. Suppose that YouYeet is one of over a dozen competitive firms in the Oviedo area that offers moving truck rentals. Based on the preceding graph showing the weekly market demand and supply curves, the price YouYeet must take as given is Fill in the price and the total, marginal, and average revenue YouYeet earns when it rents 0,1,2, or 3 trucks during move-in week. The demand curve faced by YouYeet is identical to which of its other curves? Check all that apply. Average revenue curve Supply curve Marginal cost carve Marginal revenue curve

User MDC
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Final answer:

A perfectly competitive firm acts as a price taker and faces a perfectly elastic demand curve. This demand curve is identical to the firm's average revenue and marginal revenue curves.

Step-by-step explanation:

A perfectly competitive firm acts as a price taker and the demand curve it faces is perfectly elastic or flat. The firm can sell any quantity at the prevailing market price. This means that the demand curve faced by the firm is identical to its average revenue curve and marginal revenue curve. It is not identical to the supply curve or marginal cost curve.

User Rampal Chaudhary
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Final answer:

YouYeet, as a competitive firm, must take the market price P as given. The demand curve faced by YouYeet, which is perfectly elastic, is identical to its average revenue and marginal revenue curves. The supply curve and marginal cost curve do not coincide with the firm's demand curve.

Step-by-step explanation:

The price that YouYeet must take as given is the market price P, which is a result of the intersection of the market demand and supply curves. As a competitive firm, YouYeet is a price taker and can sell any quantity of trucks at this price. The demand curve faced by a perfectly competitive firm like YouYeet is perfectly elastic or flat, and this flat demand curve is identical to both the average revenue curve and the marginal revenue curve of the firm. This is because for each additional unit sold, the average revenue and the marginal revenue remain constant, and equal to the market price P.

Therefore, when YouYeet rents out 0, 1, 2, or 3 trucks, its total revenue is simply the quantity of trucks rented multiplied by the market price P. Since the price remains constant regardless of the quantity, both the marginal revenue and average revenue will also remain equal to the market price P for each truck rented.

The supply curve and the marginal cost curve do not necessarily coincide with the firm's demand curve. The supply curve relates to the quantities that a firm is willing to sell at different prices, and the marginal cost curve outlines the additional cost of producing one more unit. In perfectly competitive markets, the marginal cost curve eventually intersects with the firm's supply curve. However, it does not coincide with the demand curve unless the firm is a monopsony, which is not the case here.

User Angelos Chalaris
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