If, at a sales level of 100 units, a monopoly's marginal revenue is $5, then
A)at a sales level of more than 100 units, marginal revenue will be more than $5.
B)at a sales level of more than 100 units, marginal revenue will be $5.
C)at a sales level of less than 100 units, marginal revenue will be $5.
D)at a sales level of more than 100 units, marginal revenue will be less than $5.
E)total revenue is $500.

Question

Quizplus · Accepted Answer

EFor a monopoly, marginal revenue decreases as the quantity sold increases due to the downward-sloping demand curve. Therefore, at a sales level of more than 100 units, marginal revenue will be less than $5. Additionally, if marginal revenue is $5 at 100 units, total revenue (price per unit times quantity) at that point is $500, assuming marginal revenue equals the additional revenue gained from selling one more unit.

If, at a Sales Level of 100 Units, a Monopoly's