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3 years ago

"when total revenue increases from $18,000 to $26,000 when quantity increases from eight to ten, marginal revenue is equal to"

Business

2 answers:

Anastasy [175]3 years ago

7 0

<u>Calculation of Marginal Revenue:</u>

Marginal Revenue can be calculated using the following formula:

Marginal Revenue = Change in Revenue/ Change in Quantity

It is given that total revenue increases from $18,000 to $26,000 when quantity increases from eight to ten. It means change in Revenue is (26000-18000) = $8,000 and Change in Quantity is (10-8) = 2

Hence, Marginal Revenue =8000/2 = $4,000

Hence the marginal revenue is <u>$4,000</u>

pickupchik [31]3 years ago

3 0

The marginal revenue is $4,000.

Further Explanation:

Marginal revenue:

Marginal revenue refers to the increase in the revenue of the commodity by selling an additional unit of commodity. It is an essential tool to identify per-unit revenue and the revenue level at a different level. The management can use this information to project and set the standard sale for the future. The marginal revenue is calculated by dividing the increase in revenue with the increase in the sold units.

$\begin{aligned}\text{Marginal revenue}&=\frac{\text{Increase in revenue}}{\text{Increase in units sold}}\end{aligned}$

Calculate the marginal revenue:

The increase in revenue is $8,000. The increase in units sold is 2.The marginal revenue can be calculated by dividing the increase in revenue with the increase in units sold. It will show the per unit increase in revenue. The marginal revenue can be calculated as follows:

$\begin{aligned}\text{Marginal revenue}&=\frac{\text{Increase in revenue}}{\text{Increase in units sold}}\\&=\frac{\$26,000-\$18,000}{10-8}\\&=\frac{\$8,000}{2}\\&=\$4,000\end{aligned}$

Thus, the marginal revenue is $4,000.

Learn More:

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Answer Details:

Grade: Middle school

Chapter: Marginal utility

Subject: Economics

Keywords: revenue, increase from one, level, ten, eight, marginal, revenue, per unit, additional, sales, management, tool, decision making,

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