Question

Consider a firm that operates in a perfectly competitive market. Currently the firm is producing 50 units of output and at that output level, marginal revenue is $6. Suppose that the firm increases output by 50%. Total revenue will be:____________

Answer 1

$450

Step-by-step explanation:

Data given in the question

Number of the units produced is 50 units

Marginal revenue is $6

Now the output increase by 50%

So, the total revenue is

= Number of units produced × marginal revenue + increased output percentage × (Number of units produced × marginal revenue)

= 50 units × $6 + 50% of $300

= $300 + $150

= $450

We simply compute by applying the above information