The Jeans Store sells 7 pairs of jeans per day when it charges $100 per pair.It sells 8 pairs of jeans per day at a price of $90 per pair.The marginal revenue of the eighth pair of jeans is
A)$20.
B)$90.
C)$100.
D)$700.

Question

Quizplus · Accepted Answer

The marginal revenue is the additional revenue from selling one more unit. Selling the eighth pair at $90 increases total revenue from $700 (7 pairs at $100) to $720 (8 pairs at $90), so the marginal revenue is $20.

The Jeans Store Sells 7 Pairs of Jeans Per Day