A monopolist increased output by 100 units but cut prices by $20 to sell this additional output...
Question:
A monopolist increased output by 100 units but cut prices by {eq}\$20 {/eq} to sell this additional output at {eq}\$1,000 {/eq} per unit. What is true about marginal revenue?
A) MR totals {eq}\$2,000 {/eq}.
B) MR totals {eq}\$100,000 {/eq}.
C) MR totals {eq}-\$2,000 {/eq}.
D) MR cannot be calculated with the information given.
Marginal Revenue:
One way to define the marginal revenue is the change over and above the current total revenue of the business. A business maximizes profit by producing where marginal revenue MR equals marginal cost MC.
Answer and Explanation: 1
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Marginal Revenue: Definition & Equation
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Chapter 2 / Lesson 13
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Learn about marginal revenue and understand how to use the marginal revenue formula. See how to calculate marginal revenue and the impact of price and marginal cost.
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