Tabl e 14-14 The following table presents cost and revenue information for Bob’s
ID: 1201852 • Letter: T
Question
Table 14-14
The following table presents cost and revenue information for Bob’s bakery production and sales.
Quantity
Total Cost
Marginal Cost
Price
Total Revenue
Marginal Revenue
0
$5.00
---
$3.25
---
1
$5.50
$3.25
2
$6.50
$3.25
3
$8.00
$3.25
4
$10.00
$3.25
5
$12.50
$3.25
6
$15.50
$3.25
7
$19.00
$3.25
8
$23.00
$3.25
1. Refer to Table 14-14. What is the marginal revenue of the 4th unit?
a. $2.00
b. $3.25
c. $10.00
d. $13.00
Quantity
Total Cost
Marginal Cost
Price
Total Revenue
Marginal Revenue
0
$5.00
---
$3.25
---
1
$5.50
$3.25
2
$6.50
$3.25
3
$8.00
$3.25
4
$10.00
$3.25
5
$12.50
$3.25
6
$15.50
$3.25
7
$19.00
$3.25
8
$23.00
$3.25
Explanation / Answer
Marginal Revenue of 4th Unit = Total Revenue of 4 Unit - Total Revenue of 3 Units
= $3.25*4 - $3.25*3
= $3.25 (b)
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