Asked by Siavash Namdari on Jul 25, 2024
Verified
When it produces and sells 90 units of output, a competitive firm's average total cost is $42 and its profit is $360. What is the firm's marginal revenue if it sells 100 units of output?
Marginal Revenue
The additional revenue that a firm gains when it sells one more unit of a product or service.
- Compute financial gains or deficits utilizing the principles of total revenue, average revenue, and marginal revenue.
- Recognize the effect of various market frameworks on the pricing policies and profitability maximization approaches of companies.
Verified Answer
FB
Felicia BurnsJul 29, 2024
Final Answer :
At Q = 9, profit is $360 = (P - $42) X 90, so P = $46. The firm's marginal revenue, including that on the 100th unit, is $46.
Learning Objectives
- Compute financial gains or deficits utilizing the principles of total revenue, average revenue, and marginal revenue.
- Recognize the effect of various market frameworks on the pricing policies and profitability maximization approaches of companies.