According to the chart, the marginal revenue
A. decreases by ten dollars as production increases.
B. increases by ten dollars as production increases.
C. falls to zero dollars as production increases.
D. remains the same as production increases.
Answer (2)
Examine the 'Marginal revenue' column in the table.
Observe that the marginal revenue is consistently $10 as production increases.
Conclude that the marginal revenue remains the same as production increases.
The marginal revenue remains the same as production increases, so the answer is remains the same as production increases.
Explanation
Understanding the Problem We are given a table that shows the relationship between the number of units produced per day, the total revenue, and the marginal revenue. The question asks how the marginal revenue changes as production increases.
Analyzing the Table To answer the question, we need to examine the 'Marginal revenue' column in the table and observe how the values change as the 'produced per day' increases.
Determining the Behavior of Marginal Revenue Looking at the table, the 'Marginal revenue' is always $10, regardless of the number of units produced per day. This means that the marginal revenue remains the same as production increases.
Final Answer Therefore, the correct answer is: remains the same as production increases.
Examples
Understanding marginal revenue is crucial in business. For example, if a company knows that each additional product sold brings in a consistent marginal revenue, they can make informed decisions about production levels. If a toy company sees a marginal revenue of $10 for each toy, they know that increasing production by one toy will increase their revenue by $10, helping them optimize their output and profitability.
The marginal revenue remains the same as production increases. Therefore, the correct answer is D: remains the same as production increases. This suggests consistent revenue generation from additional units sold, which is important for business decision-making.
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