Table 14-4
A monopolist faces the following demand curve:

-Refer to Table 14-4.If the monopolist produces 5 units,what is its average revenue?
A) $100
B) $20
C) $5
D) $4

Question

Table 14-4
A monopolist faces the following demand curve:
 
-Refer to Table 14-4.If the monopolist produces 5 units,what is its average revenue?
A) $100 
B) $20 
C) $5 
D) $4

Quizplus · Accepted Answer

To find the average revenue at a production level of 5 units, we need to divide the total revenue by the quantity produced. Looking at the table, we can see that at 5 units, the price is $25. Therefore, the total revenue is $25 x 5 = $125.

Now we can calculate the average revenue:

Average Revenue = Total Revenue / Quantity Produced 
Average Revenue = $125 / 5 
Average Revenue = $25

Therefore, the correct answer is B) $20.

Table 14-4 A Monopolist Faces the Following Demand Curve