Table 9.3 Julie plans to start a pet-sitting service.She surveyed her neighbourhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 9.3 above shows a portion of her survey results.
-Refer to Table 9.3.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7 per hour.What is her marginal revenue?
A)It is $7 for the first hour and starts declining thereafter.
B)It is $7 for the first hour and starts increasing thereafter.
C)It is constant at $7.
D)It coincides with the figures in the table; $12 for the first hour, $10 for the second, $9 for the third and $8 for the fourth.

Question

Table 9.3  Julie plans to start a pet-sitting service.She surveyed her neighbourhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 9.3 above shows a portion of her survey results.
-Refer to Table 9.3.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7 per hour.What is her marginal revenue?
A)It is $7 for the first hour and starts declining thereafter. 
B)It is $7 for the first hour and starts increasing thereafter. 
C)It is constant at $7. 
D)It coincides with the figures in the table; $12 for the first hour, $10 for the second, $9 for the third and $8 for the fourth.

Quizplus · Accepted Answer

Marginal revenue is the additional revenue that a producer receives from selling one more unit of a good or service. If Julie charges a constant price of $7 per hour for her service, her marginal revenue from each additional hour of service provided is also $7, regardless of how many hours she works. This is because the additional income she makes for each extra hour of work is always $7, matching her constant charge rate.

Table 93 Julie Plans to Start a Pet-Sitting Service