Consider a monopolist selling her output in two markets,A and B.The price elasticity of demand in market A is 1.5,while the same in market B is 2.5.Calculate the marginal revenue [MR] from each market,if the monopolist charges $300 for the product in both the markets. A)MR_A = 13.3;MR_B = 24.8 B)MR_A = 6.11;MR_B = 35.8 C)MR_A = 11.11;MR_B = 64.8 D)MR_A = 15.3;MR_B = 74.8

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Quizplus · Accepted Answer

Marginal revenue (MR) can be calculated using the formula MR = P(1 + 1/E), where P is the price and E is the price elasticity of demand. For market A, MR = 300(1 - 1/1.5) = 300(1 - 2/3) = 300(1/3) = 100. For market B, MR = 300(1 - 1/2.5) = 300(1 - 2/5) = 300(3/5) = 180. The choices provided do not directly match these calculations, indicating a possible misunderstanding in the question's presentation or in the interpretation of the formula used for calculating marginal revenue.

Consider a Monopolist Selling Her Output in Two Markets,A and B.The