This table represents the revenues faced by a monopolist. Using the information in the table shown,the marginal revenue for the 4^th unit is: A)higher than that of the 3^rd unit. B)lower than that of the 3^rd unit. C)the same as that of the 3^rd unit. D)That cannot be calculated from the information given.

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue from producing one additional unit. From the table, the total revenue for producing 3^rd units is $18, while the total revenue for producing 4^th units is $21. The change in total revenue is $21 - $18 = $3. Therefore, the marginal revenue for producing the 4^th unit is $3. Since the total revenue for the 3^rd unit is $15, and the marginal revenue for that unit is $3 (the same as the 4^th unit), we can conclude that the marginal revenue for the 4^th unit is lower than that of the 3^rd unit.

This Table Represents the Revenues Faced by a Monopolist