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 price is being charged for 4 units?
A) $52 each
B) $18 each
C) $60 each
D) $12 each
E) $20 each

Question

Quizplus · Accepted Answer

We know that the monopoly sells 3 units at $20 each, so the total revenue from those 3 units is 3*$20=$60. We also know that when the monopoly sells 4 units, the total revenue increases to $72. To find the price for 4 units, we can subtract the revenue from the first 3 units from the total revenue for 4 units: $72-$60=$12. Thus, the price for 4 units is $12 each, which corresponds to choice B.

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