Question

A jeweller sells 3 diamond rings at $ Rs.12,000 $ per ring. If he sells 4 rings, his marginal revenue of the 4th ring will be $ Rs.10,500 $ . At what price will he sell four rings?

Answer 1

Hint: For solving this question, we will find the total revenue for the 3 ring sold and then add it to the given revenue of the 4th ring and the find the average by performing $ \dfrac{total\ revenue}{number\ of\ rings} $ and that is the value we require.

Complete step-by-step answer:
Given in the question, that a jeweller sells 3 diamond rings at $ Rs.12,000 $ per ring. If he sells 4 rings, his marginal revenue of the 4th ring will be $ Rs.10,500 $ .
The marginal revenue defines the revenue gained by producing one additional unit of a product or service.
The selling price actually means the price for which the product or service is sold.
Here in this question it is given that the jeweller sells 3 diamond rings at $ Rs.12,000 $ per ring.
So, the total revenue for these 3 rings will be\[Rs.12,000\times 3=Rs.36,000\].

It is also given in this question that the marginal revenue of the $ {{4}^{th}} $ ring is $ Rs.10,500 $ .

Hence, the total revenue for the 4 rings sold will be the sum of the total revenue for the rings and the marginal revenue for the $ {{4}^{th}} $ ring \[=Rs.36,000+Rs.10,500=Rs.46,500\]

So, the average revenue or price of 4 rings will be $ \dfrac{total\ revenue}{number\ of\ rings}=\dfrac{46,500Rs.}{4}=11,625Rs. $
Hence, the answer here, the average price at which the jeweller will sell the 4 rings is

Note: Here we should understand the question carefully and correctly. If we misunderstand the question and commit mistakes we will end up having a completely different answer which we will be wrong.
For example if we take 12,000+10,500 as total and try to calculate we will get an answer $ \dfrac{12,000+10,500}{2}=\dfrac{22,500}{2}=11,250 $ .
We know that it is a wrong answer.