Answer to Question #309437 in Microeconomics for Kirsten

Question

If a monopolist can sell 100 units at a price of R20 and 110 units at a price of R19 the marginal revenue for each unit between 100 and 110 is

Answer 1

It's simple to compute marginal revenue. All you have to know is that marginal revenue is the profit generated from the sale of extra units. It is calculated by dividing the change in revenue by the change in quantity.

Top executives aren't always able to see the company's marginal expenses. Profit maximization data, on the other hand, explains the company's capacity to establish a price that is higher than marginal cost.

In this case,

$TR$ at 100 units $=$ $R20$

$TR$ at 110 units $=$ $R19$

The marginal revenue at the 110 units will be $(19-20) =-1$

The marginal revenue at 100 units will be $(20-19)= 1$

The marginal revenue for each unit between 100 and 110 is $R1$