Suppose a firm in a competitive market earned $2,000 in total revenue and had a marginal revenue of $20 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold?

Question

Quizplus · Accepted Answer

In a competitive market, marginal revenue equals average revenue. Therefore, the average revenue per unit is $20. To find the number of units sold, divide total revenue ($2,000) by the average revenue per unit ($20), which equals 100 units.

Suppose a Firm in a Competitive Market Earned $2,000 in Total