Question

Quantity Price Total Revenue Average Revenue Marginal Revenue
1 $35 $35
2 $64 $32 $29
3 $29
4 $17
5 $23 $11
6 $120
7 $17 –$1
8 –$7
9 $99 $11 –$13

Refer to Table 15-1. Assume this monopolist's marginal cost is constant at $11. What quantity (Q) of output will it produce and what price (P) will it charge?

Answer 1

TR$=5×23=$ $$115;$ this is at Q $=5;$

with Q $=6:$

MR $=\frac{120-115}{6-5}=5;$

Answer: Q=5, P=23;