If a Price-Searcher Firm Can Sell 4 Units at a Price

question 91

Multiple Choice

If a price-searcher firm can sell 4 units at a price of $6 or it can sell 5 units at a price of $5, the marginal revenue from the fifth unit is

• A) $1.
• B) $5.
• C) $6.
• D) $25.

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Definitions:

Direct Materials

Raw materials that are directly incorporated into the finished product and can be easily traced to it.

Ideal Standards

Standards that can be achieved only under perfect operating conditions, such as no idle time, no machine breakdowns, and no materials spoilage; also called theoretical standards.

Machine Breakdowns

Unplanned events where machinery or equipment fails to operate, potentially causing disruptions in production and incurred costs for repairs and maintenance.

Materials Spoilage

Products or components that are damaged, expired, or otherwise unable to be used in production, often leading to waste and financial loss.