Multiple Choice
According to the chart, what is the marginal cost of producing the second pie?
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0. Basic Principles of Economics
Marginal Analysis
Multiple Choice
Given the following demand schedule, what is the marginal revenue (MR) for the 10th unit?| Quantity | Price ||---------|-------|| 9 | \$15 || 10 | \$14 |Assume the firm can sell all units at the listed price for each quantity.
A
\$5
B
\$9
C
\$6
D
\$14
Verified step by step guidance1
Identify the total revenue (TR) at the quantity of 9 units by multiplying the price at 9 units by 9: \(TR_9 = 9 \times 15\).
Calculate the total revenue at the quantity of 10 units by multiplying the price at 10 units by 10: \(TR_{10} = 10 \times 14\).
Recall that marginal revenue (MR) is the change in total revenue from selling one more unit, so use the formula: \(MR = TR_{10} - TR_9\).
Substitute the values of \(TR_{10}\) and \(TR_9\) into the formula to find the marginal revenue for the 10th unit.
Interpret the result as the additional revenue generated by selling the 10th unit, considering the price decrease from \$15 to \$14.
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