When the monopoly firm sells two units of its product, it earns total revenue of $960 and it incurs a total cost of $870. If its marginal revenue for the second unit was $475, what was the marginal revenue of the first unit?
A)$90
B)$485
C)$395
D)$1,355
E)There is not enough information to answer the question.

Question

Quizplus · Accepted Answer

The total revenue for two units is $960. Given that the marginal revenue for the second unit is $475, we subtract this from the total revenue to find the revenue from the first unit: $960 - $475 = $485. Therefore, the marginal revenue of the first unit is $485.

When the Monopoly Firm Sells Two Units of Its Product