If a perfectly competitive firm has total revenue of $400 when it produces 100 units, and if its total revenue increases to $404 when it produces 101 units, then the marginal revenue of the last unit produced is

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Quizplus · Accepted Answer

Marginal revenue is the change in total revenue divided by the change in quantity. In this case, the change in total revenue is $404 - $400 = $4, and the change in quantity is 101 - 100 = 1. Therefore, the marginal revenue of the last unit produced is $4 / 1 = $4.

If a Perfectly Competitive Firm Has Total Revenue of $400