Suppose a Firm in a Competitive Market Produces and Sells

Multiple Choice

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from the sales. If the firm increases its output to 200 units, the average revenue of the 200th unit will be

A) less than $12.
B) more than $12.
C) $12.
D) Any of the above may be correct depending on the price elasticity of demand for the product.