Marginal revenue is
A) the price at which a product is sold multiplied by the cost of producing the product.
B) the price at which a product is sold divided by the number of units of the product sold.
C) the change in total revenue divided by the change in quantity sold.
D) the change in quantity sold divided by the change in total revenue.
E) the additional cost to produce one more unit of output.

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue divided by the change in quantity sold. It measures the additional revenue a firm earns from selling one more unit of its product. It is important for firms to understand their marginal revenue so they can determine the optimal level of output to produce and set prices accordingly.

Marginal Revenue Is