Suppose a single-price monopoly sells 3 units of a good at $20 per unit.If the monopoly sells 4 units,the total revenue increases to $72.What is the marginal revenue of the fourth unit?
A) $52
B) $18
C) $60
D) $12
E) $20

Question

Quizplus · Accepted Answer

Total revenue of selling 3 units at $20 per unit is 3*$20 = $60.
To increase total revenue to $72, the monopoly must have earned $12 from the fourth unit.
Therefore, the marginal revenue of the fourth unit is $12.

Suppose a Single-Price Monopoly Sells 3 Units of a Good