When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $9 it sells 62 units. The marginal revenue for the firm over this range is

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue divided by the change in quantity sold. Using the given information, we can calculate the marginal revenue for the range between 64 and 62 units as follows:

Marginal revenue = (Total revenue from selling 62 units - Total revenue from selling 64 units) / (Quantity sold for $9 - Quantity sold for $8)
= (($9 x 62) - ($8 x 64)) / (62 - 64)
= ($558 - $512) / (-2)
= $23

Therefore, the marginal revenue for the firm over this range is $23.

When a Certain Monopoly Sets Its Price at $8 It