The total revenue of a purely competitive firm from selling 6 units of output is $48. Based on this information, total revenue for 7 units of output must be
A)$56.
B)$54.
C)$55.
D)$336.

Question

Quizplus · Accepted Answer

The marginal revenue of a purely competitive firm is equal to the price of the output. Since the firm sold 6 units of output for a total revenue of $48, the price of each unit must be $8. Therefore, the total revenue for 7 units of output would be $8 x 7 = $56.

The Total Revenue of a Purely Competitive Firm from Selling