Scenario 1-2
Suppose a hat manufacturer currently sells 2,000 hats per week and makes a profit of $5,000 per week. The plant owner observes, "Although the last 300 hats we produced and sold increased our revenue by $1,000 and our costs by $1,100, we are still making an overall profit of $5,000 per week so I think we're on the right track. We are producing the optimal number of hats."
-Refer to Scenario 1-1. Using marginal analysis terminology, another economic term for the incremental revenue received from the sale of the last 300 hats is

Question

Quizplus · Accepted Answer

Marginal revenue is the additional revenue earned by producing and selling one more unit of a product. In this scenario, the incremental revenue from selling the last 300 hats is an example of marginal revenue.

Scenario 1-2 Suppose a Hat Manufacturer Currently Sells 2,000 Hats Per Week