Question

Bennie’s Radiator Shop has installed a new machine that increases production by 200 units. Each unit sells for $30. What is the marginal revenue product of the new machine?

a. $6,000b. $30c. $170d. 200 unitse. Insufficient data

Answer 1

a. $6,000

Step-by-step explanation:

Since the new machine has increased the production by 200 units, therefore the marginal revenue shall be recognised with reference to the new 200 units produced by the new machine.

The marginal revenue shall be calculated as follow:

Marginal revenue=marginal units*revenue per unit

Marginal revenue=200*30

=$6,000

So the answer is a. $6,000