Exhibit 23-6

-Refer to Exhibit 23-6.A perfectly competitive firm operating in the market depicted in graph (1)is producing 311 units of output at the profit-maximizing level.What is the marginal revenue of the 312th unit?

Question

Exhibit 23-6
 
-Refer to Exhibit 23-6.A perfectly competitive firm operating in the market depicted in graph (1)is producing 311 units of output at the profit-maximizing level.What is the marginal revenue of the 312th unit?

Quizplus · Accepted Answer

In a perfectly competitive market, the price of each unit is equal to the marginal revenue. At the profit-maximizing quantity of 311 units, the price is $15. At this level of output, the marginal revenue is also $15. To determine the marginal revenue of the 312th unit, we need to look at the change in revenue when one more unit is produced. If the firm produces the 312th unit, the total revenue will increase from $4665 to $4675. Therefore, the marginal revenue of the 312th unit is $10 ($4675 - $4665).

Exhibit 23-6 -Refer to Exhibit 23-6.A Perfectly Competitive Firm Operating in the Firm