QUESTION 42 Assume that Roscoes Rascals decided to add the p

QUESTION 42 Assume that Roscoe\'s Rascals decided to add the pet food line. Two months after it began selling the food, its pet food sales deelin dramatically because a competitor across the street started selling the identical food for $20 per bag. What is the marginal revenue from selling each bag of specialty pet food?

Solution

Ans:

42)

marginal revenue from selling each bag of speciality pet food = $20

marginal revenue is the additional revenue from selling a additional unit of output.In this case competitor is selling for $20 per bag.Hence if market price is $20 per bag, the marginal revenue from selling each bag of speciality pet food is $20.