When a monopolist sells two units of output its total revenues are $100. When the monopolist sells three units of output, its price per unit is $35. The monopolist's marginal revenue from selling the third unit of output is
A) $5.
B) $33.33.
C) $35.
D) $105.

Question

Quizplus · Accepted Answer

The marginal revenue from selling the third unit is the additional revenue gained from selling that unit. When selling two units, total revenue is $100. Selling three units at $35 each gives total revenue of $105. The marginal revenue for the third unit is the change in total revenue, which is $105 - $100 = $5.

When a Monopolist Sells Two Units of Output Its Total