Table 13-1

-Refer to Figure 13-1.The marginal revenue from the increase in price from P₀ to P₁ equals
A)the area A.
B)the area (B + D - A).
C)the area (A -
D).
D)the area (C -

Question

Table 13-1
 
-Refer to Figure 13-1.The marginal revenue from the increase in price from P₀ to P₁ equals
A)the area A.
B)the area (B + D - A). 
C)the area (A - 
D). 
D)the area (C -

Quizplus · Accepted Answer

The marginal revenue from the increase in price from P₀ to P₁ equals the change in total revenue divided by the change in quantity sold. From the graph, the change in total revenue is equal to the area ABD, and the change in quantity sold is equal to the difference in quantity between Q₀ and Q₁. Therefore, the marginal revenue is equal to (ABD)/(Q₀-Q₁). This simplifies to A-D, so the answer is C.

Table 13-1 -Refer to Figure 13-1.The Marginal Revenue from the Increase in from the Increase