A monopoly firm can sell 200 units of output for $36.00 per unit.Alternatively,it can sell 201 units of output for $35.50 per unit.What is the marginal revenue of the 201st unit of output
A)-$35.50
B)-$64.50
C)$64.50
D)$35.50

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 total revenue of $7200. Selling 201 units at $35.50 each gives total revenue of $7135.50. The marginal revenue for the 201st unit is $7135.50 - $7200 = -$64.50.

A Monopoly Firm Can Sell 200 Units of Output for $36.00