Suppose a single-price monopolist sells 3 units of a good at $20 per unit. If the...
Suppose a single-price monopolist sells 3 units of a good at $20 per unit. If the monopoly sells an additional unit, the incremental revenue is $12. What price is being charged for 4 units?
$18 each
$12 each
$60 each
$52 each
$20 each
Homework Answers
Ans: $18 each
Explanation:
When 3 units of a good are sold at $20 per unit;
Total revenue = $20 * 3 = $60
The incremental revenue $12 is received by selling 4th units , it means total revenue increases by $12.
Now , total revenue = $60 + $12 = $72
So the price charged for 4 units = $72 / 4 = $18
Add Answer to:
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