Question

A jeweller sells $3$ diamond-rings at $Rs.12,000$ per ring. If he sells $4$ rings, his marginal revenue of $4th$ ring will be $Rs.10,500$. At what price will he sell four rings?

Answer 1

(i) Total revenue of $3$ rings $=Rs.12,000\times 3=Rs.36,000$
(ii) Marginal revenue of $4thring=Rs.10,500$
(iii) Total revenue of $4rings=Rs.36,000+Rs.10,500=Rs.46,500$
(iv) Average revenue or price of $4rings=Rs.46,500÷4=Rs.11,625$.
$Price=Rs.11,625$.