A monopoly's demand curve is such that it can sell 100 units at $10 each or 101 units at a price of $9.50 each. The marginal revenue of the one hundred and first unit is:
A) $950.
B) $60.50.
C) -$40.50.
D) $95.

Question

Quizplus · Accepted Answer

The marginal revenue is the change in total revenue from selling one more unit. Selling 100 units at $10 each gives $1000, and selling 101 units at $9.50 each gives $959.50. The marginal revenue is $959.50 - $1000 = -$40.50.

A Monopoly's Demand Curve Is Such That It Can Sell