Question

A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.98 per unit. The marginal revenue of the 151st unit of output is Group of answer choices -$6.98. -$0.02. $2.45. $6.98.

Answer 1

If A monopoly firm can sell 150 units of output for $10 per unit. The marginal revenue of the 151st unit of output is $6.98.

Marginal revenue

Using this formula

Marginal revenue=(Number of units×Price per units)-(Alternate Number of units×Price per units)

Let plug in the formula

Marginal revenue=(151 units×$9.98 per units)-(150 units×$10 per units)

Marginal revenue=$1,506.98-$1,500

Marginal revenue=$6.98

Therefore the marginal revenue of the 151st unit of output is $6.98.

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