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A raspberry farm sells frozen raspberries at a constant price of $4 per pack. According to Table 8.2 in the source, what is the marginal revenue from selling the fourth pack?
A$1
B$0
C$4
D$16
Answer & Solution
Correct answer: C. $4
1. Marginal revenue is the change in total revenue divided by the change in quantity.
2. Selling the fourth pack raises total revenue from $12 to $16, a $4 increase, for one additional unit.
3. That $4 marginal revenue matches the constant $4 price, since price and marginal revenue are equal for a price-taking firm.
4. The $16 figure is the total revenue from four packs, not the marginal revenue from the fourth pack alone.
_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_
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