Answer to Question #180533 in Microeconomics for khalista

Question

if the monopolist wants to increase the quantity sold from two units to three units it cuts the price from $16-$12 the marginal revenue equals?

Answer 1

Marginal revenue=$\frac{change in revenue}{change in quantity}$

Change in Revenue=$\$16-\$12=4$

Change in quantity=$2-3=-1$

Marginal revenue=$\frac{4}{-1}=-4$