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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): - Economics

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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

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Solution

The correct option is (c). Marginal revenue is the change in total revenue when one more unit of a good is sold. Assume that a firm sells any level of quantity of output at a given price, we can find that the firm’s Marginal revenue = Average Revenue.

Concept: Total, Average and Marginal Revenue
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