Question

Consider a perfectly competitive market described by the supply function P = 10 + 0.2Q and demand function P = 60 - 0.3Q. If the market is in equilibrium, then an individual firms total revenue (TR), average revenue (AR) and marginal revenue (MR) functions are:

TR = 26Q, AR = 26, and MR = 26
TR = 30Q, AR = 30, and MR = 30
TR = 35Q, AR = 35, and MR = 35
TR = 60 - 0.3Q, AR = 60 - 0.6Q, and MR = 60 - 0.3Q
TR = 60Q - 0.3Q2 , AR = 60 - 0.3Q, and MR = 60 - 0.6Q

Answer 1

Market equilibrium happens when supply is equal to demand
supply: P = 10 + 0.2Q
demand: P = 60 - 0.3Q

10 + 0.2Q = 60 - 0.3Q
0.2Q + 0.3Q = 60 + 10
0.5Q = 70
Q = 70/0.5
Q = 140