Michelin notices that when the number of tires it sells increases from 1,000,000 to 1,000,001, total revenue rises $35. The $35 represents the firm's
A) average revenue.
B) marginal revenue.
C) price elasticity.
D) average variable revenue.
E) average total cost.

Question

Quizplus · Accepted Answer

The $35 increase in revenue from selling one additional tire indicates the change in total revenue resulting from a change in output, which is the definition of marginal revenue.

Michelin Notices That When the Number of Tires It Sells