Table 15-1

A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1.
-Refer to Table 15-1.What is the marginal revenue from the sale of the 12th unit?
A)$75
B)$50
C)$20
D)-$5

Question

Table 15-1
  
A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1.
-Refer to Table 15-1.What is the marginal revenue from the sale of the 12th unit?
A)$75 
B)$50 
C)$20 
D)-$5

Quizplus · Accepted Answer

To find the marginal revenue, we need to first find the total revenue for 12 units and subtract the total revenue for 11 units. Given that the price is $100 for each unit, the total revenue for 12 units is 12*$100 = $1200. The total revenue for 11 units is 11*$100 = $1100. Therefore, the marginal revenue from the sale of the 12th unit is $1200 - $1100 = $100.

To determine the best choice, we need to look at the marginal cost and marginal revenue. From the table, we can see that the marginal cost of producing the 12th unit is $80. Since the marginal revenue of $100 is greater than the marginal cost of $80, it is profitable to produce the 12th unit. However, if the marginal cost was greater than the marginal revenue, it would not be profitable to produce the 12th unit. Therefore, the best choice is to produce 12 units.

Table 15-1 a Monopoly Producer of Foreign Language Translation Software Faces a Language