Suppose that a pure monopolist can sell 20 units of output at $10 per unit and 21 units at $9.75 per unit.The marginal revenue of the 21st unit of output is
A)$9.75.
B)$204.75.
C)$4.75.
D)$.25.

Question

Quizplus · Accepted Answer

The marginal revenue is the change in total revenue from selling one more unit. Selling 20 units at $10 gives $200, and selling 21 units at $9.75 gives $204.75. The marginal revenue for the 21st unit is $204.75 - $200 = $4.75.

Suppose That a Pure Monopolist Can Sell 20 Units of Output