When a firm expands output from 10 to 11 units and total revenue increases from $100 to $110, marginal revenue of the eleventh unit is:
A) $110.
B) $11.
C) $10.
D) $210.

Question

Quizplus · Accepted Answer

Marginal revenue is the additional revenue generated from selling one more unit of output. In this case, the firm expanded output from 10 to 11 units, and total revenue increased from $100 to $110. Therefore, the marginal revenue of the eleventh unit is $10, which is the difference between the new total revenue ($110) and the old total revenue ($100) divided by the increase in output (1). So, the answer is C, $10.

When a Firm Expands Output from 10 to 11 Units