The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7

-A clothing store can sell two shirts for $20 each or three shirts for $18 each. At a quantity of three shirts sold, marginal revenue is _____.
A)$18
B)$14
C)$54
D)$20
E)$44

Question

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7
 
-A clothing store can sell two shirts for $20 each or three shirts for $18 each. At a quantity of three shirts sold, marginal revenue is _____.
A)$18 
B)$14 
C)$54 
D)$20 
E)$44

Quizplus · Accepted Answer

Marginal revenue is the additional revenue that one more unit of a product will bring. It's calculated as the change in total revenue divided by the change in quantity sold. Selling two shirts brings in $40 (2 shirts * $20 each), and selling three shirts brings in $54 (3 shirts * $18 each). The change in total revenue from selling the third shirt is $54 - $40 = $14. Thus, the marginal revenue of selling the third shirt is $14.

The Figure Given Below Shows the Aggregate Demand and Supply