Table 13-1

-Refer to Table 13-1.What portion of the marginal revenue of the 4th unit is due to the output effect and what portion is due to the price effect?
A)output effect = $24.00; price effect = $19.50
B)output effect = $6.50; price effect = $2.00
C)output effect = -$0.50; price effect = $5.00
D)output effect = $6.00; price effect = -$1.50

Question

Table 13-1
 
-Refer to Table 13-1.What portion of the marginal revenue of the 4th unit is due to the output effect and what portion is due to the price effect?
A)output effect = $24.00; price effect = $19.50 
B)output effect = $6.50; price effect = $2.00 
C)output effect = -$0.50; price effect = $5.00 
D)output effect = $6.00; price effect = -$1.50

Quizplus · Accepted Answer

The output effect is the revenue gained from selling one more unit at the new price, while the price effect is the loss in revenue from selling all previous units at the lower price. In this case, the output effect is $6.00 and the price effect is -$1.50.

Table 13-1 -Refer to Table 13-1.What Portion of the Marginal Revenue of the Marginal