A monopolist can sell 200 units of output for $36 per unit.Alternatively,it can sell 201 units of output for $35.80 per unit.The marginal revenue of the 201^st unit of output is A) $-4.20. B) $-0.20. C) $4.20. D) $35.80.

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 $7,200. Selling 201 units at $35.80 each gives $7,195.80. The marginal revenue for the 201st unit is $7,195.80 - $7,200 = -$4.20.

A Monopolist Can Sell 200 Units of Output for $36