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JAMB Economics 1993 Question 20

Question 20

Theory of Costs and Revenue

Output in units; total revenue (N); average revenue (N); marginal revenue (N):
1; 20; 20; ---
2; 38; 19; 18
3; 54; ---; 16
4; 68; ---; ---
5; 80; 16; ---
Given an output of 3 units, the average revenue is

  1. A.N16.00
  2. B.N18.00
  3. C.N20.00
  4. D.N24.00
Show the answer and explanation

Answer: B (N18.00)

Explanation

Average revenue = total revenue ÷ output = 54 ÷ 3 = N18.