Stereo Sound Unlimited has a monopoly over the installation of surround sound systems. If Stereo Sound Unlimited's total revenue from installing 10 sound systems is $20,000 and its total revenue from installing 11 sound systems is $18,000, what is the marginal revenue of the eleventh sound system?
A) -$2,000
B) -$1,000
C) $2,000
D) $3,800

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue from selling one more unit. Here, the total revenue decreases from $20,000 to $18,000 when the eleventh system is installed, so the marginal revenue is $18,000 - $20,000 = -$2,000.

Stereo Sound Unlimited Has a Monopoly Over the Installation of Surround