A monopolist can sell 7 units per day at $7 per unit or 8 units per day at $6 per unit. Its marginal revenue for the eighth unit of output is:
A)$48.
B)$6.
C)$1.
D)−$1.
E)$7.

Question

Quizplus · Accepted Answer

The marginal revenue is the change in total revenue from selling one more unit. Selling 7 units at $7 each gives $49, and selling 8 units at $6 each gives $48. The change in total revenue is $48 - $49 = -$1.

A Monopolist Can Sell 7 Units Per Day at $7