A purely competitive firm currently producing 30 units of output earns marginal revenues of $12 from each extra unit of output it sells. If it sells 30 units, then its total revenues would be
A)$360.
B)$240.
C)$120.
D)indeterminate based on the information given.

Question

Quizplus · Accepted Answer

Total revenue is calculated by multiplying the price per unit by the number of units sold. In a purely competitive market, marginal revenue equals the price. Therefore, if the firm earns $12 from each extra unit of output (indicating the price per unit is $12), and it sells 30 units, the total revenue would be 30 units * $12/unit = $360.

A Purely Competitive Firm Currently Producing 30 Units of Output