If a Perfectly Competitive Firm Sells 30 Units of Output

question 171

Multiple Choice

If a perfectly competitive firm sells 30 units of output at a price of $10 per unit, its marginal revenue is:

• A) $10.
• B) more than $10.
• C) less than $10.
• D) $300.

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Definitions:

Mixed Costs

Expenses that contain both fixed and variable components, changing in total with the level of activity.

Contribution Margin

The amount left from sales revenue after variable costs are subtracted, contributing to covering fixed costs and generating profit.

Merchandising Company

Businesses that buy finished goods and sell them at a profit without modifying the product, focusing on distribution rather than production.

Sales Revenue

The income generated from the sale of goods or services before any costs or expenses are deducted.