Question

Q1 A monopolist can sale 25 units of output per day for a price of k11.50 each and 26 units of output per day for a price of k11.50 each. The marginal revenue earned from the 26th units sold is

Answer 1

Total Revenue$=$ quantity$×$ price

25$×$k11.50$=$ k287.5

26$×$ k11.50$=$ k299

MR$=$ $\frac {change in total revenue}{change in quantity sold}$

$MR=$ $\frac {299-287.5}{26-25}$

MR$=$ k 11.50