If the quantity demanded for a hand-carved pineapple is 2 at a price of $16, and the quantity demanded will increase to 3 if the seller lowers the price to $14, what is the seller's marginal revenue from selling 3 units of pineapple?
A) 8
B) 24
C) 10
D) 14

Question

Quizplus · Accepted Answer

To find the seller's marginal revenue from selling 3 units of pineapple, we need to calculate the change in total revenue when the seller sells one more unit of pineapple.

At a price of $16, the seller sells 2 units, so the total revenue is:

$16 x 2 = $32

When the seller lowers the price to $14, the quantity demanded increases to 3 units, so the total revenue is:

$14 x 3 = $42

Therefore, the change in total revenue when the seller sells one more unit of pineapple is:

$42 - $32 = $10

This means that the seller's marginal revenue from selling 3 units of pineapple is $10. Therefore, the best choice is C.

If the Quantity Demanded for a Hand-Carved Pineapple Is 2