A monopoly earns total revenue of $20,000 when it sells 200 units of output and total revenue of $22,000 when it sells 240 units of output. Thus, the marginal revenue of the 240th unit is $91.67.

Question

Quizplus · Accepted Answer

The marginal revenue of the 240th unit is calculated by the change in total revenue divided by the change in quantity sold. The change in total revenue is $22,000 - $20,000 = $2,000, and the change in quantity is 240 - 200 = 40 units. Therefore, the marginal revenue per unit is $2,000 / 40 = $50.

A Monopoly Earns Total Revenue of $20,000 When It Sells