10. Refer to the table below. Price Quantity TR $ 75 100 $ 7,500 $ 70 125 $ 8,75
ID: 1139763 • Letter: 1
Question
10. Refer to the table below.
Price
Quantity
TR
$ 75
100
$ 7,500
$ 70
125
$ 8,750
$ 60
225
$ 13,500
$ 55
300
$ 16,500
$ 50
400
$ 20,000
What is the marginal revenue from selling 300 units instead of 225 units?
Select one:
a. 35
b. 40
c. 50
d. 55
Price
Quantity
TR
$ 75
100
$ 7,500
$ 70
125
$ 8,750
$ 60
225
$ 13,500
$ 55
300
$ 16,500
$ 50
400
$ 20,000
Explanation / Answer
Marginal revenue is the addition to total revenue when output is changed by one unit.
So total revenue when 225 units is being sold is $13500
Total revenue when 300 units is being sold is $16500
Thus addition to total revenue when 75 more units is sold is 16500-13500=$3000
Thus marginal revenue =3000/75=40
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