Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist.
$$\begin{array} { | c | c | }
\hline \text { Quntity } & \text { Price } \
\hline 1 & \$ 10 \
\hline 2 & \$ 9 \
\hline 3 & \$ 8 \
\hline 4 & \$ 7 \
\hline 5 & \$ 6 \
\hline 6 & \$ 5 \
\hline 7 & \$ 4 \
\hline 8 & \$ 3 \
\hline
\end{array}$$ The marginal revenue of the fifth unit of output is:
A)$30.
B)$6.
C)$2.
D)?$2.

Question

Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist.  
$$\begin{array} { | c | c | } 
\hline \text { Quntity } & \text { Price } \
\hline 1 & \$ 10 \
\hline 2 & \$ 9 \
\hline 3 & \$ 8 \
\hline 4 & \$ 7 \
\hline 5 & \$ 6 \
\hline 6 & \$ 5 \
\hline 7 & \$ 4 \
\hline 8 & \$ 3 \
\hline
\end{array}$$ The marginal revenue of the fifth unit of output is:
A)$30.
B)$6.
C)$2.
D)?$2.

Quizplus · Accepted Answer

Marginal revenue (MR) is the change in total revenue from selling one more unit of a product. To find the MR of the fifth unit, calculate the total revenue (TR) for selling 4 units and 5 units, then find the difference. TR = Price × Quantity. For 4 units, TR = $7 × 4 = $28. For 5 units, TR = $6 × 5 = $30. The change in TR (MR) from the 4th to the 5th unit is $30 - $28 = $2.

Suppose the Accompanying Table Describes the Relationship Between Price and Quantity