Refer to Table 13.3. If a monopoly faces the demand schedule given in the table, what is its marginal revenue from the 600th unit it sells?

A) -$1
B) $1
C) $1.50
D) $100

Question

Refer to Table 13.3. If a monopoly faces the demand schedule given in the table, what is its marginal revenue from the 600th unit it sells?A)  -$1B)  $1C)  $1.50D)  $100

Adilene Velasquez · Accepted Answer

Final Answer : A, Explanation :  The marginal revenue from the 600th unit is calculated by the change in total revenue from selling one more unit. Selling 600 units at $1.50 each generates $900 in total revenue, while selling 500 units at $2.00 each generates $1000 in total revenue. The change in total revenue from selling the 600th unit (going from 500 to 600 units) is $900 - $1000 = -$100. However, since the question asks for the marginal revenue of just the 600th unit, we divide this change by the change in quantity (100 units), resulting in -$100 / 100 = -$1.

Refer to Table 13.3. If a monopoly faces the demand schedule given in the table, what is its marginal revenue from the 600th unit it sells?

A) -$1
B) $1
C) $1.50
D) $100

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