When price is equal to 7, a monopolist can sell 30 units of output, and when...
When price is equal to 7, a monopolist can sell 30 units of
output, and when price is equal to 6, a monopolist can sell 40
units of output.
What is the firm's marginal revenue?
Homework Answers
Answer
$3
Total revenue when price is 7 = 7*30=210
Total revenue when price is 6 = 6*40=240
Marginal revenue is the change in revenue due to change in output the formula is:
MR=∆Revenue/∆Output
Or MR = (240-210)/(40-30)
Or MR = $3
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