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7 August, 09:23

Bennie's Radiator Shop has installed a new machine that increases production by 200 units. Each unit sells for $30. What is the marginal revenue product of the new machine? a. $6,000 b. $30 c. $170 d. 200 units e. Insufficient data

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  1. 7 August, 12:05
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    B. $30

    Explanation:

    Marginal revenue is the revenue gained from the sale of an additional unit. It is calculated by dividing the change in total revenue by change in total output quantity.

    That is

    MR = Change in Total Revenue/

    Change in quantity sold

    In the question,

    Change in quantity sold = 200 unit

    Change in total revenue at $30 per unit = 30 * 200 = $6000

    Therefore,

    MR = 6000/200

    = $30
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