Question

Consider a firm that sells lamps in a perfectly competitive market. As its sales go up from 10 lamps to 11 lamps, its total revenue increases from $500 to $550. What is the marginal revenue of this firm

Answer 1

The marginal revenue is $50

Step-by-step explanation:

MR = 50

The marginal revenue is the increase in revenue brought about by sale of one extra unit. In this case, that would be $50.

Marginal Revenue

= change in total revenue / change in quantity

= 550−500 / 11−10

= 50/1 = $50

MR=$50