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Gross Profit Ratio

Marginal reve...

Question

Marginal revenue refers to the price of the last unit of a commodity.

A

True

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B

False

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Solution

The correct option is B False
Marginal revenue simply refers to additional revenue earned when an additional unit of a commodity is sold. It happens to be equal to price under perfect competition. But under monopoly and monopolistic competition, $M R$ and price are different from each other.

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Q. What is the relation between market price and marginal revenue of a price taking firm?

Q. Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is 10.

Quantity sold	TR	MR	AR
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Q. Complete the following table of a monopolistically competitive firm:

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1	$-$	10	$-$
2	9	$-$	$-$
3	$-$	$-$	24
4	$-$	4	$-$

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Output (Units)	Price (Rs.)	Total Revenue (Rs.)	Marginal Revenue (Rs.)
$1$ $2$ $3$ $4$	- - - -	$6$ - - -	- $2$ $- 2$ $- 2$

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