Question

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is:

Answer 1

Marginal revenue -$75.40

Step-by-step explanation:

Marginal revenue is change in revenue due to 1 unit change therefore we need to calculate total change in revenue

we know that

total revenue
`= (Price)/(times\ Quantity)`

for 300 unit total revenue is
`= (45)/(300) = 13500`

And for 301 unit total revenue is
`= (44.60)/(301) = 13424.6`

Now

Marginal revenue = net total revenue = (13424.6 - 13500) = -$75.40