The demand for a product is 30 units when the price is Rs. 10, however the demand rises to 31 when the price is reduced to Rs. 9.95 per unit. The marginal revenue from production and sale of additional unit from 30 to 31 is __________.
The demand for a product is 30 units when the price is Rs. 10, however the demand rises to 31 when the price is reduced to Rs. 9.95 per unit. The marginal revenue from production and sale of additional unit from 30 to 31 is __________.
The correct option is A Rs. 8.45
Marginal
revenue refers to the change in revenue or additional revenue which a firm
earns on selling a unit more of its output. It is calculated by dividing the change in
total revenue by change in total quantity of commodity sold.
Marginal revenue = Change in total revenue/ Change in quantity
of commodity sold.
Change in total revenue = Rs. ( 31 x 9.95 - 30 x 10)
= Rs. (308.45 - 300)
= Rs. 8.45
Change in quantity sold = (31 - 30) units
= 1 unit
Marginal revenue = Rs. 8.45 / 1 unit = Rs. 8.45.
Marginal revenue refers to the change in revenue or additional revenue which a firm earns on selling a unit more of its output. It is calculated by dividing the change in total revenue by change in total quantity of commodity sold.
Marginal revenue = Change in total revenue/ Change in quantity of commodity sold.
Change in total revenue = Rs. ( 31 x 9.95 - 30 x 10)
= Rs. (308.45 - 300)
= Rs. 8.45
Change in quantity sold = (31 - 30) units
= 1 unit
Marginal revenue = Rs. 8.45 / 1 unit = Rs. 8.45.
