If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3, then the marginal revenue of selling the eighth unit is equal to
A)$3.
B)$4.
C)$24.
D)-$4.

Question

Quizplus · Accepted Answer

The monopolist sells 7 units at a price of $4, so the total revenue from selling these units is 7 x $4 = $28.

When the monopolist lowers the price to $3, they sell 8 units. However, the total revenue from selling these units is 8 x $3 = $24.

This means that the marginal revenue for the eighth unit is equal to:

Marginal revenue = Total revenue from selling 8 units - Total revenue from selling 7 units

Marginal revenue = $24 - $28

Marginal revenue = -$4

Therefore, the answer is D, as the marginal revenue of selling the eighth unit is equal to -$4.

If a Monopolist Can Sell 7 Units When the Price