A monopolist can sell 200 units of output for $36.00 per unit.Alternatively,it can sell 201 units of output for $35.80 per unit.The marginal revenue of the 201ˢᵗ unit of output is
A)$-4.20.
B)$-0.20.
C)$4.20.
D)$35.80.

Question

Quizplus · Accepted Answer

The marginal revenue is the change in total revenue from selling one more unit. Selling 200 units at $36 each gives $7,200. Selling 201 units at $35.80 each gives $7,195.80. The change in revenue is $7,195.80 - $7,200 = -$4.20.

A Monopolist Can Sell 200 Units of Output for $36