Question 20
HardOriginal questionA firm can sell more only by lowering its price.
| Output | 1 | 2 | 3 | 4 | 5 | 6 |
|---|---|---|---|---|---|---|
| Price (₹) | 20 | 18 | 16 | 14 | 12 | 10 |
If the firm could sell a 7th unit only by cutting the price to ₹8, what would the MR of the 7th unit be?
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
TR₇ = 8 × 7 = ₹56; TR₆ = ₹60.
MR₇ = 56 − 60 = ₹−4: selling the 7th unit lowers total revenue.
- Concept
- Negative MR
- Typical timeTypical
- 100 s
- Your timeYours
- —
Practise this chapter →
Ten questions from Revenue & Producer's Equilibrium, at your own pace.