If the Market Price Is $40 in a Perfectly Competitive

question 178

Multiple Choice

If the market price is $40 in a perfectly competitive market, what is the marginal revenue from selling the fifth unit?

• A)$8.
• B)$20.
• C)$40.
• D)$200.

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Definitions:

Contribution Format

A way of presenting a profit and loss statement where costs are separated into variable and fixed, and the contribution margin is highlighted.

Target Profit

The goal set for the amount of net income a company plans to achieve at a specific time.

Units Sold

The quantity of product units that have been sold during a particular time period.

Contribution Format

The contribution format is a financial statement layout that separates fixed and variable costs, allowing for easier calculation of contribution margin and breakeven analysis.