Question
A firm is able to sell any quantity of a good at a given price. The firm's marginal revenue will be:
(Choose the correct alternative):
(a) Greater than Average Revenue
(b) Less than Average Revenue
(c) Equal to Average Revenue
(d) Zero
Solution
(c) The firm's marginal revenue will be equal to average revenue as marginal revenue is net addition to the revenue when an additional unit is produced.
