When a firm in a competitive market produces 10 units of output, it has marginal revenue of $8.What is the firm's total revenue when it produces nine units of output?

Question

Quizplus · Accepted Answer

When the firm produces 10 units of output, the marginal revenue is $8. This means that the firm earns an additional $8 for every additional unit of output produced. Therefore, the total revenue for the 10 units of output is:
10 units x $8 marginal revenue = $80
When the firm produces nine units of output, we do not know the marginal revenue. However, we can calculate the total revenue by using the concept of marginal revenue. If marginal revenue is $8 for each unit, then the firm would earn:
8 units x $8 marginal revenue = $64
However, since the firm is only producing nine units, we need to subtract the marginal revenue earned from the tenth unit that is not being produced:
9 units x $8 marginal revenue - 1 unit x $8 marginal revenue = $72 - $8 = $64
Therefore, the total revenue for the nine units of output is $64. The correct answer is C.

When a Firm in a Competitive Market Produces 10 Units