Suppose Wendy's Coffee Factory produces and sells in a perfectly competitive market. At Wendy's current level of production, she is producing the profit-maximizing level of coffee. At this quantity the average total cost of a pound of coffee is $5 and marginal revenue is $7. Given this information, what will be the long run equilibrium price of a pound of Wendy's coffee?
A) Greater than $7 (B) $7 (C) Between $5 and $7 (D) $5 (E) Less than $5.
Therefore, which of the following is not true for a firm in perfect competition?
A) Marginal revenue equals the change in total revenue from selling one more unit. (B) Profit equals total revenue minus total cost.
(C) Average revenue is greater than marginal revenue. (D) Price equals average revenue.
Any help would be appreciated, thanks!
Suppose Wendy's Coffee Factory produces and sells in a perfectly competitive market. At Wendy's current level of production, she is producing the profit-maximizing level of coffee. At this quantity the average total cost of a pound of coffee is $5 and marginal revenue is $7. Given this information, what will be the long run equilibrium price of a pound of Wendy's coffee?
A) Greater than $7 (B) $7 (C) Between $5 and $7 (D) $5 (E) Less than $5.
Therefore, which of the following is not true for a firm in perfect competition?
A) Marginal revenue equals the change in total revenue from selling one more unit. (B) Profit equals total revenue minus total cost.
(C) Average revenue is greater than marginal revenue. (D) Price equals average revenue.
Any help would be appreciated, thanks!
