The following question are based on the following demand schedule for a monopolist:

-If the monopolist wished to sell 4 units,the marginal revenue of the fourth unit would be
A) greater than the marginal revenue of the third unit.
B) less than the price necessary to sell 4 units.
C) greater than the total revenue earned by selling 4 units.
D) equal to the demand curve for selling 4 units.
E) impossible to calculate.

Question

The following question are based on the following demand schedule for a monopolist:
 
-If the monopolist wished to sell 4 units,the marginal revenue of the fourth unit would be
A) greater than the marginal revenue of the third unit. 
B) less than the price necessary to sell 4 units. 
C) greater than the total revenue earned by selling 4 units. 
D) equal to the demand curve for selling 4 units. 
E) impossible to calculate.

Quizplus · Accepted Answer

In a monopolistic market, to sell more units, the monopolist must lower the price not just for the additional units but for all units sold. Therefore, the marginal revenue (the revenue from selling one more unit) of the fourth unit would be less than the price at which those 4 units are sold because lowering the price to sell the fourth unit also decreases the revenue from the first three units sold.

The Following Question Are Based on the Following Demand Schedule