The following represents a portion of the demand schedule faced by a monopoly firm.
TABLE 9-1

-Refer to Table 9-1. What is the marginal revenue of the third unit of output?
A) $1
B) $8
C) $10
D) $12

Question

The following represents a portion of the demand schedule faced by a monopoly firm.
TABLE 9-1
 
-Refer to Table 9-1. What is the marginal revenue of the third unit of output?
A) $1 
B) $8 
C) $10 
D) $12

Quizplus · Accepted Answer

To determine the marginal revenue (MR) of the third unit of output, we need to look at the change in total revenue (TR) between the second and third units. From the table, we see that the total revenue from selling two units is $16 and the total revenue from selling three units is $24. Therefore, the change in TR is $8.

MR = Change in TR / Change in Q  
MR = $8 / 1 
MR = $8

Therefore, the marginal revenue of the third unit of output is $8.

As for the best choice(s), we cannot determine that without more information. We would need to know the cost of producing each unit in order to calculate the profit-maximizing level of output.

The Following Represents a Portion of the Demand Schedule Faced