$$\begin{array}{l}
\begin{array} { c c }
\hline \text { Price } & \text { Quantity } \
\hline 9 & 1 \
8 & 2 \
7 & 3 \
6 & 4 \
5 & 5 \
4 & 6 \
3 & 7 \
2 & 8 \
1 & 9 \
\hline
\end{array}\
\text { Table } 7.1
\end{array}$$
-Refer to Table 7.1, which shows the relationship between the price that Gladys charges for a product and the quantity of that product that Gladys sells. The marginal revenue that Gladys receives from selling the fifth unit of output is:
A)$5, because that is the price per unit of output that Gladys receives.
B)$5, because that is the quantity that Gladys sells.
C)$25, because Gladys sells five unit of output at a price of $5.
D)$1, because Gladys earns $1 more in revenues by increasing her output to five units from four units.

Question

$$\begin{array}{l}
\begin{array} { c c } 
\hline \text { Price } & \text { Quantity } \
\hline 9 & 1 \
8 & 2 \
7 & 3 \
6 & 4 \
5 & 5 \
4 & 6 \
3 & 7 \
2 & 8 \
1 & 9 \
\hline
\end{array}\
\text { Table } 7.1
\end{array}$$
-Refer to Table 7.1, which shows the relationship between the price that Gladys charges for a product and the quantity of that product that Gladys sells. The marginal revenue that Gladys receives from selling the fifth unit of output is:
A)$5, because that is the price per unit of output that Gladys receives.
B)$5, because that is the quantity that Gladys sells.
C)$25, because Gladys sells five unit of output at a price of $5.
D)$1, because Gladys earns $1 more in revenues by increasing her output to five units from four units.

Quizplus · Accepted Answer

The marginal revenue is the additional revenue from selling one more unit. Selling the fifth unit increases total revenue from $24 (6 units at $4) to $25 (5 units at $5), so the marginal revenue is $1.