Principles of Microeconomics / Unit 7 MIC 0604 short lesson, about 20 seconds
Marginal Revenue Equals Price
Captions available
The idea
Marginal revenue is the extra revenue from one more unit sold. For a price taker it equals the price, every unit, because selling more never lowers the price.
In practice
Each flat sells for the same thirty dollars whether it is the first or the eighth.
Where people slip
Price, marginal revenue and the firm's demand curve are one horizontal line here. Unit eight breaks that equality.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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