Suppose a price searcher faces the following demand curve: At $100, $90, $80, $70, and $60, the quantity demanded is 1, 2, 3, 4, and 5 units respectively. Which statement below is true?
A) Total revenue is $100.
B) Total revenue is $190 when 2 units are sold.
C) Total revenue is $400 when 5 units are sold.
D) Marginal revenue is $80 when the price is $90.
D
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Critical assumptions behind the Laffer curve include
a. labor supply is inelastic. b. investment is very responsive to higher savings and lower interest rates. c. the economy is above the marginal tax rate that maximizes tax revenue. d. both b and c. e. all of the above.
Adam Smith noted that when public expenditures are undertake for the general benefit of everyone in a society then _____
a. there is considerable conflict between the benefit principle and the ability-to-pay principle b. there is no conflict between the benefit principle and the ability-to-pay principle c. the benefit principle provides little guide to tax policy d. the ability-to-pay principle provides little guide to tax policy