Question

A firm sells peanuts in a perfectly competitive market. Upon increasing production output from 60 packages to 75 packages, the total revenue increased from $300to $375. What was the marginal revenue of this increase in production

Answer 1

$5

Explanation:

The computation of marginal revenue is shown below:-

Marginal revenue = Change in total revenue ÷ Change in output

= ($375 - $300) ÷ (75 - 60)

= $75 ÷ 15

= $5

The marginal revenue could be computed by dividing the change in total revenue from the change in output so that the increased in production could come