• Share

# Marginal Revenue and Marginal Cost Practice Question

#### 2 of 6

Marginal Revenue and Marginal Cost Practice Question - Part 1

Marginal Revenue and Marginal Cost Data - Image 2

### Part 1: Total Revenue (TR) at each Quantity (Q) level

Here we are trying to answer the following question for the company: "If we sell X units, what will our revenue be? We can calculate this by the following steps:

If the company does not sell a single unit, it will not collect any revenue. So at quantity (Q) 0, total revenue (TR) is 0. We mark this down in our chart.

If we sell one unit, our total revenue will be the revenue we make from that sale, which is simply the price. Thus our total revenue at quantity 1 is \$5, since our price is \$5.

If we sell 2 units, our revenue will be the revenue we get from selling each unit. Since we get \$5 for each unit, our total revenue is \$10.

We continue this process for all the units on our chart. When you've completed the task, your chart should look the same as the one below.