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

The marginal revenue for each unit is equal to the change in total revenue from selling one additional unit. From the table, we can see that when the quantity increases from 3 units to 4 units, the total revenue increases from $36 to $39, which means the marginal revenue for the 4th unit is $3. Similarly, when the quantity increases from 2 units to 3 units, the total revenue increases from $26 to $36, which means the marginal revenue for the 3rd unit is $10. Therefore, the marginal revenue for the 3rd unit is higher than that of the 4th unit, so the answer is B, lower than that of the 3rd unit.

This Table Represents the Revenues Faced by a Monopolist