Refer to the information provided in Table 13.3 below to answer the question(s) that follow.
Table 13.3
$$\begin{array} { | c | c | }
\hline \text { Price } ( \$ ) & \text { Quantity } \
\hline 4.00 & 100 \
\hline 3.50 & 200 \
\hline 3.00 & 300 \
\hline 2.50 & 400 \
\hline 2.00 & 500 \
\hline 1.50 & 600 \
\hline 1.00 & 700 \
\hline
\end{array}$$
-Refer to Table 13.3. If a monopoly faces the demand schedule given in the table, its marginal revenue is positive
A) at prices above $2.00.
B) at all prices.
C) at prices below $2.00.
D) at all price but $2.00.

Question

Refer to the information provided in Table 13.3 below to answer the question(s) that follow.
Table 13.3
 $$\begin{array} { | c | c | } 
\hline \text { Price } ( \$ ) & \text { Quantity } \
\hline 4.00 & 100 \
\hline 3.50 & 200 \
\hline 3.00 & 300 \
\hline 2.50 & 400 \
\hline 2.00 & 500 \
\hline 1.50 & 600 \
\hline 1.00 & 700 \
\hline
\end{array}$$
-Refer to Table 13.3. If a monopoly faces the demand schedule given in the table, its marginal revenue is positive
A) at prices above $2.00.
B) at all prices.
C) at prices below $2.00.
D) at all price but $2.00.

Quizplus · Accepted Answer

Marginal revenue (MR) is positive when the additional revenue from selling one more unit is greater than zero. In a monopoly, MR is positive as long as the price elasticity of demand is greater than one, which typically occurs at higher prices. As the price decreases, the quantity demanded increases, but the additional revenue gained from selling each additional unit decreases. At higher prices (above $2.00 in this case), the increase in revenue from selling an additional unit is still positive, indicating that the MR is positive at prices above $2.00.

Refer to the Information Provided in Table 13 -Refer to Table 13