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10 January, 06:55

Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of $8.00. What would be the firm's total revenue if it instead produced and sold 4 units of output?

a. $4

b. $8

c. $32

d. $64

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Answers (1)
  1. 10 January, 07:08
    0
    option (c) $32

    Explanation:

    Data provided in the question:

    The firm is in a competitive market

    Number of units produced = 8

    Marginal revenue = $8.00

    Number of units sold = 4 units of output

    Now,

    If a firm is in a competitive market, the horizontal demand curve i. e the price remains the constant

    therefore,

    The firm's total revenue will be = Number of units sold * Marginal revenue

    = 4 * $8

    = $32

    Hence,

    The correct answer is option (c) $32
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