If a price-searcher firm can sell nine units at a price of $6, or it can sell ten units at a price of $5.75, what is the marginal revenue of the tenth unit?

Question

Quizplus · Accepted Answer

The marginal revenue is the change in total revenue from selling one more unit. Total revenue from selling nine units at $6 is $54. Total revenue from selling ten units at $5.75 is $57.50. The marginal revenue of the tenth unit is $57.50 - $54 = $3.50.

If a Price-Searcher Firm Can Sell Nine Units at a Price