Chapter 59, Problem 1MCQ

To determine

The firm’s total revenue

Answer to Problem 1MCQ

(e) $1000.

Explanation of Solution

A firm’s total revenue is the money accruing to the firm by selling goods and services in the market, Total revenue of a firm is

  

Where R is total revenue,

P is price and Q is quantity sold.

Here, in the question, the price at the profit-maximizing level is $20, and the quantity sold of a bushel of tomatoes is 50.

Total revenue will be ($20 × 50) = $1000.

Hence (e) is the right answer.

Options (a), (b), (c), and (d) are incorrect.

The price level of $14 and $15 are not profit-maximizing levels. Hence, $560 and $750 are not the right answers.

Economics Concept Introduction

Introduction:

Total revenue of a firm is the proceedings of the firm by the sale of the goods produced. It is the money generated by selling goods and services to buyers. It is usually calculated by multiplying the price by the quantity sold by the firm.