In understanding marginal revenue it is crucial to keep in mind the idea that a firm must sell all its output at a single price. This kind of firm sets market price at the beginning of some market period (it could be a week, a month, or a year or any other period). Some firms place advertisements giving prices, or print up boxes with the price of the item printed the box.
Some firms sell at different prices to different people, or
sell at one price for a period of time then have a "sale" somewhat
later. These are examples of price discrimination which we will
also consider, but for now let's examine the simple case.
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