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)impossible to determine.

Question

Quizplus · Accepted Answer

The marginal revenue for the eighth unit is calculated by the change in total revenue when the eighth unit is sold. Selling 7 units at $7 each gives a total revenue of $49. Selling 8 units at $6 each gives a total revenue of $48. The marginal revenue for the eighth unit is $48 - $49 = -$1.

A Monopolist Can Sell 7 Units Per Day at $7