Use the information in this table tocalculate total revenue, marginal revenue, and marginal costs. Indicate the profit-maximizing level ofoutput. What market structure is this firm operating in?
Question 5a. Use the information in this table tocalculate total revenue, marginal revenue, and marginal costs. Indicate the profit-maximizing level ofoutput. What market structure is this firm operating in? What would change if the structure were
Output. Price (GHc). Total Costs (GHc)
1 5 10
2 5 12
3 5 15
4 5 19
5 5 24
6. 5 30
7 5 45
Under what circumstances would a large size provide an advantage to a firm? How could it serve as a barrier to entry?
c. You and your rival must simultaneously decide what price to advertise in the weekly newspaper. If you each charge a low price, you each earn zero profits. If you each charge a high price, you each earn profits of GH¢3. If you charge different prices, the one charging the higher price loses GH¢5 and the one charging the lower price makes GH¢5.i. Find the equilibrium when there are no repeated transactions.ii. Now suppose there are repeated transactions. How would that change the results?
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