Home › AP Microeconomics › Economics › Perfect Competition › How is marginal revenue defined in the source?
How is marginal revenue defined in the source?
AThe additional revenue gained from selling one more unit
BThe total revenue earned from all units sold
CThe average revenue per unit across all output levels
DThe additional cost of producing one more unit
Answer & Solution
Correct answer: A. The additional revenue gained from selling one more unit
1. Marginal revenue is defined against a single additional unit of output, not the total or the average.
2. It is the additional revenue a firm gains from selling that one more unit.
3. Total revenue across all units sold is a different, broader concept than marginal revenue.
4. The additional cost of producing one more unit is marginal cost, a separate concept from marginal revenue.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 8 "Perfect Competition", section 8.2 | How Perfectly Competitive Firms Make Output Decisions_
Related questions
Between 1997 and 2014, the source reports that North Dakota corn acreage more than doubledAccording to the source, do market structures such as monopoly, monopolistic competition, The source cautions that calling perfect competition 'efficient' should be taken with a grSuppose firms in the wholesale flower market instead produce more than the allocatively efIn the wholesale flower market example, suppose firms produce a smaller quantity than the How does the source define allocative efficiency in a perfectly competitive market?How does the source define productive efficiency?According to the source, how does the long-run supply curve differ across the three indust