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Question
Table 13-1| Quantity | Price (dollars) | Total Revenue (dollars) |
| 1 | $7.50 | $7.50 |
| 2 | 7.00 | 14.00 |
| 3 | 6.50 | 19.50 |
| 4 | 6.00 | 24.00 |
| 5 | 5.50 | 27.50 |
| 6 | 5.00 | 30.00 |
Refer to Table 13-1. What portion of the marginal revenue of the 4th unit is due to the output effect and what portion is due to the price effect?
A) output effect = $24.00; price effect = $19.50
B) output effect = $6.50; price effect = $2.00
C) output effect = -$0.50; price effect = $5.00
D) output effect = $6.00; price effect = -$1.50
Answer
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