Assume a non-price discriminating monopolist can sell 20 units of a good for 4.00 each and can sell 21 units of that good for $ 3.85 each.The marginal revenue of the 21st unit is:

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue from selling one more unit. In this case, the total revenue from selling 20 units is 20 * $4.00 = $80.00. The total revenue from selling 21 units is 21 * $3.85 = $80.85. Therefore, the marginal revenue from selling the 21st unit is $80.85 - $80.00 = $0.85.

Assume a Non-Price Discriminating Monopolist Can Sell 20 Units of a Good