Table 16-1
Julie plans to start a pet-sitting service.She surveyed her neighborhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 16-1 below shows a portion of her survey results.
-Refer to Table 16-1.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 16-1
  Julie plans to start a pet-sitting service.She surveyed her neighborhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 16-1 below shows a portion of her survey results.
-Refer to Table 16-1.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 earned by providing one more unit of a good or service. Since Julie charges $7 per hour and each person surveyed demands only one hour of pet-sitting service per period, the marginal revenue for Julie is also $7 as it is constant for each hour of service provided. Therefore, the correct answer is C.

Table 16-1 Julie Plans to Start a Pet-Sitting Service.She Surveyed