A local cable company has a monopoly on cable service.If it sells 20 of the services its total revenue is $10,000 and if it sells 21 services its total revenue is $10,600.The marginal revenue of the 21st service sold is
A) $13.
B) $600.
C) $800.
D) $850.

Question

Quizplus · Accepted Answer

To find the marginal revenue of the 21st service, we need to calculate the change in total revenue when going from selling 20 services to 21 services.

Change in total revenue = Total revenue from selling 21 services - Total revenue from selling 20 services

Change in total revenue = $10,600 - $10,000

Change in total revenue = $600

So the marginal revenue of the 21st service sold is $600, which is Option B.

A Local Cable Company Has a Monopoly on Cable Service