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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

A firm in a competitive market receives $500 in total revenue and has marginal revenue of $10. What is the average revenue, and how many units were sold?

To determine
The average revenue and units sold.

Explanation

In perfect competition, the profit maximizing condition of marginal cost is equal to marginal revenue, average revenue, and price level. So the marginal revenue is $10, then the average revenue also $10.

The quantity of unit sold can be calculated using the following formula.

Quantity=Total revenueP

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