Suppose a monopoly pharmaceutical company produces a drug and sells 100 prescriptions for $25 each.In order to sell 101 prescriptions,the monopolist must lower the price to $24 per prescription.The marginal revenue of the 101^st prescription is:

Question

Quizplus · Accepted Answer

The marginal revenue (MR) from selling the 101st prescription is calculated by the total revenue (TR) difference between selling 101 units and 100 units. Initially, TR for 100 prescriptions is 100 * $25 = $2500. When selling 101 prescriptions at $24 each, TR is 101 * $24 = $2424. The change in TR (MR) is $2424 - $2500 = -$76.

Suppose a Monopoly Pharmaceutical Company Produces a Drug and Sells