Marginal Revenue is the rate of change of Total Revenue.
So when we want to know the marginal revenue at a certain quantity, we check by how much the total revenue changed from the previous quantity unit.
For example, looking at the table,
- At quantity 1, the total revenue is 20.
- At quantity 2, the total revenue is 38.
- At quantity 3, the total revenue is 54.
So the marginal revenue at quantity 2 is the difference between total revenue of quantity 2 with the previous quantity (which is quantity 1). So,
[tex]38-20=18[/tex]
Similarly, the marginal revenue at quantity 3 is the difference between total revenue of quantity 3 with the previous quantity (which is quantity 2). So,
[tex]54-38=16[/tex]
Our answer is 16, option C.
ANSWER: C
