Multiple Choice
Which of the following best describes the behavior of fixed cost per unit as output increases?
22
views
0. Basic Principles of Economics
Marginal Analysis
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Refer to Table 14-4. If the total revenue from selling 3 units is \$30 and the total revenue from selling 4 units is \$36, what is the marginal revenue from selling the 4th unit?
A
\$3
B
\$6
C
\$4
D
\$9
Verified step by step guidance1
Identify the total revenue (TR) at the quantity before selling the 4th unit, which is the revenue from selling 3 units. Here, TR at 3 units is given as \$30.
Identify the total revenue at the quantity after selling the 4th unit, which is the revenue from selling 4 units. Here, TR at 4 units is given as \$36.
Recall the formula for marginal revenue (MR), which is the change in total revenue when one more unit is sold: \(MR = TR_{new} - TR_{old}\).
Substitute the values into the formula: \(MR = 36 - 30\).
Calculate the difference to find the marginal revenue from selling the 4th unit.
Related Videos
Related Practice
Marginal Analysis practice set
Problem sets built by lead tutorsExpert video explanations