Suppose that the firm with the costs and revenues tabulated as below is contemplating whether to produce 12 units of output. If it were to produce this many units, what (if anything) would happen to the market price? What would be the firm’s marginal revenue for the 12th unit produced? What would be the firm’s total revenues per hour?
Concept Introduction:
Marginal revenue: The marginal revenue is the additional revenue earned by the firm by producing an additional unit of the commodity. The marginal revenue is calculated by dividing the change in total revenue by change in quantity produced.
Total revenue: Total revenue is the revenue made from producing all units of the commodity. The total revenue is found out by multiplying price into quantity.
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