If a monopolist's demand curve is P = 55 - 5Q,the marginal revenue of the fourth unit of output is
A) $50.
B) $35.
C) $15.
D) $5.
E) unknown.

Question

Quizplus · Accepted Answer

The marginal revenue (MR) is calculated by differentiating the total revenue (TR) function. TR = P * Q = (55 - 5Q) * Q = 55Q - 5Q^2. The derivative of TR with respect to Q is MR = 55 - 10Q. For the fourth unit (Q=4), MR = 55 - 10(4) = 15.

If a Monopolist's Demand Curve Is P = 55 -