Table 14-12
Bill's Birdhouses
-Refer to Table 14-12. What is the marginal revenue from selling the 5th unit?

Question

Table 14-12
Bill's Birdhouses 
-Refer to Table 14-12. What is the marginal revenue from selling the 5th unit?

Quizplus · Accepted Answer

To find the marginal revenue from selling the 5th unit, we need to look at the change in total revenue from selling the 4th and 5th units.

From the table, we see that the total revenue from selling 4 units is $320, and the total revenue from selling 5 units is $400.

Therefore, the marginal revenue from selling the 5th unit is the difference between these two amounts, which is $80.

To maximize revenue, Bill should continue producing and selling units as long as the marginal revenue is greater than the marginal cost. We do not have information about the marginal cost, so we cannot determine the best choice(s) for Bill beyond this question.

Table 14-12 Bill's Birdhouses