Suppose that a pure monopolist can sell 4 units of output at $2 per unit and 5 units at $1.75 per unit.The monopolist will produce and sell the fifth unit if its marginal cost is
A)$1 or less.
B)$.75 or less.
C)$1.75 or less.
D)$2 or less.

Question

Quizplus · Accepted Answer

The monopolist will produce and sell the fifth unit if the marginal cost is less than or equal to the marginal revenue from selling that unit. The marginal revenue from selling the fifth unit is $1.75, so the marginal cost must be $0.75 or less to make it profitable.

Suppose That a Pure Monopolist Can Sell 4 Units of Output