Question

When output increases from 8 units to 10 units and TR increases from Rs. 270 to Rs. 300, then MR is __________.

• A. Rs. 30
• B. Rs. 20
• C. Rs. 15
• D. Rs. 40

Answer 1

The correct option is C Rs. 15

When output increases from 8 units to 10 units and TR increases from Rs. 270 to Rs. 300, then MR is Rs 15.

Total increase in TR for 2 units= 300-270 =30

Total increase in TR for 1 unit= MR= 30/2 =15In perfectly competitive market any quantity can be demanded at the given price level.When a firm is able to sell more quantity of output at the same price, then AR=MR. Price line is the same as both firm's MR curve and firm's AR curve under the perfect competition.