A purely competitive firm currently producing 20 units of output earns marginal revenues of $12 from each extra unit of output it sells. If it sells 30 units, then its total revenues would be
A) $120.
B) $240.
C) $360.
D) indeterminate based on the given information.

Question

Quizplus · Accepted Answer

In a purely competitive market, the marginal revenue is equal to the price of the product. Therefore, if the firm sells 30 units at a marginal revenue of $12 per unit, the total revenue would be 30 units * $12 = $360.

A Purely Competitive Firm Currently Producing 20 Units of Output