A monopolistic firm has a sales schedule such that it can sell 10 prefabricated garages per week at $10,000 each, but if it restricts its output to 9 per week it can sell these at $11,000 each. The marginal revenue of the 10th unit of sales per week is
A)$−1,000.
B)$9,000.
C)$1,000.
D)$10,000.

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue resulting from the sale of one additional unit of output. In this case, the total revenue from selling 10 units is $100,000, and the total revenue from selling 9 units is $99,000. Therefore, the marginal revenue from selling the 10th unit is $1,000.

A Monopolistic Firm Has a Sales Schedule Such That It