Show Stoppers is a monopoly provider of ticket services for the concerts and sporting events and their current service charge is $10.00.In order to attract one more customer,they have to lower their service charge to $9.50.Show Stoppers' marginal revenue of this additional customer is:
A) $9.50.
B) greater than $9.50.
C) less than $9.50.
D) between $10.00 and $9.50.

Question

Quizplus · Accepted Answer

In a monopoly, marginal revenue is less than the price because to sell an additional unit, the monopolist must lower the price on all units sold. Thus, the marginal revenue from attracting one more customer is less than $9.50.

Show Stoppers Is a Monopoly Provider of Ticket Services for the Concerts