If a monopolist lowers price from $10 to $8 per unit and quantity demanded increases from three to four units, the marginal revenue from thefourth unit is $32.

Question

Quizplus · Accepted Answer

If the monopolist lowers the price from $10 to $8 per unit, the total revenue from selling four units would be:

Old total revenue = $10 x 3 units = $30
New total revenue = $8 x 4 units = $32

Therefore, the increase in total revenue from selling the fourth unit is $32 - $30 = $2.

The marginal revenue from selling the fourth unit is the additional revenue generated from selling one more unit, which is $2.

So, the statement is false as the marginal revenue for the fourth unit is $2, not $32.

If a Monopolist Lowers Price from $10 to $8 Per