Question

If a monopolist can sell 100 units at a price of R20 and 110

units at a price of R19, the marginal
revenue for each unit between 100 and 110 is

Answer 1

the marginal revenue for each unit between 100 and 110 is R181.

Step-by-step explanation:

To find the marginal revenue for each unit between 100 and 110, we need to first calculate the total revenue at each quantity.

At a price of R20, the monopolist can sell 100 units, so the total revenue is:

TR(100) = R20 * 100 = R2000

At a price of R19, the monopolist can sell 110 units, so the total revenue is:

TR(110) = R19 * 110 = R2090

The change in total revenue from selling one more unit at a quantity of 110 is:

MR(110) = TR(110) - TR(109) = R2090 - R1909 = R181

Therefore, the marginal revenue for each unit between 100 and 110 is R181.