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You are given the following functions in a fully competitive market:Market demand function: Qd = 20 3PMarket supply function: Qs = 4 + PWhere P is priceA) In which price should a fully competitive firm sell its product?B) Compute the average revenue and the marginal revenue of a fully competitive firmC) Illustrate in diagrams both the curves of the average and the marginal revenue.
Answer:a Qd=20 3P Qs = 4 + P by solving rwo equations simulaneously, we get 4+P=20-3P 4P=16 P=4 Answer b total revenue…

= PQ= 20/3Q-QQ/3=20*8/3-8*8/3=32 Marginal revenue=dTR/dQ= 20/3-2Q/3=20/3-16/3=4/3=1.33



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