The price and total revenue for the monopoly firm Mammoth, Inc. based on the quantity it sells is shown in this table:
\begin{tabular}{lll}
Q & Price & Total revenue \
\hline 0 & $\$ 20$ & $\$ 0$ \
1 & $\$ 18$ & $\$ 18$ \
2 & $\$ 16$ & $\$ 32$ \
3 & $\$ 14$ & $\$ 42$ \
4 & $\$ 12$ & $\$ 48$ \
5 & $\$ 10$ & $\$ 50$ \
6 & $\$ 8$ & $\$ 48$
\end{tabular}

What is the marginal revenue (MR) for the third unit and the fourth unit?
Choose 1 answer:
(A) $M R(3)=\$ 10 ; M R(4)=\$ 6$
(B) $M R(3)=\$ 10 ; M R(4)=\$ 10$
(C) $M R(3)=\$ 6 ; M R(4)=\$ 6$
(D) $M R(3)=-\$ 2 ; M R(4)=-\$ 2$
(巨) $M R(3)=\$ 14 ; M R(4)=\$ 12$

Question

The price and total revenue for the monopoly firm Mammoth, Inc. based on the quantity it sells is shown in this table:
\begin{tabular}{lll} 
Q & Price & Total revenue \
\hline 0 & $\$ 20$ & $\$ 0$ \
1 & $\$ 18$ & $\$ 18$ \
2 & $\$ 16$ & $\$ 32$ \
3 & $\$ 14$ & $\$ 42$ \
4 & $\$ 12$ & $\$ 48$ \
5 & $\$ 10$ & $\$ 50$ \
6 & $\$ 8$ & $\$ 48$
\end{tabular}

What is the marginal revenue (MR) for the third unit and the fourth unit?
Choose 1 answer:
(A) $M R(3)=\$ 10 ; M R(4)=\$ 6$
(B) $M R(3)=\$ 10 ; M R(4)=\$ 10$
(C) $M R(3)=\$ 6 ; M R(4)=\$ 6$
(D) $M R(3)=-\$ 2 ; M R(4)=-\$ 2$
(巨) $M R(3)=\$ 14 ; M R(4)=\$ 12$

Accepted Answer

∻Solution∻ ‖ a ⋮ Calculation of Marginal Revenue for the Third Unit: Marginal revenue (MR) is the change in total revenue (TR) from selling one more unit. To find $MR(3)$, we calculate the difference in total revenue when the quantity increases from 2 to 3. ‖ ‖ b ⋮ Mathematical Expression for $MR(3)$: $MR(3) = TR(3) - TR(2) = \$42 - \$32 = \$10$. ‖ ‖ c ⋮ Calculation of Marginal Revenue for the Fourth Unit: Similarly, to find $MR(4)$, we calculate the difference in total revenue when the quantity increases from 3 to 4. ‖ ‖ d ⋮ Mathematical Expression for $MR(4)$: $MR(4) = TR(4) - TR(3) = \$48 - \$42 = \$6$. ‖ ∻Answer∻ ⚹ (A) $MR(3)=\$10 ; MR(4)=\$6$ ⚹ ∻Key Concept∻ ⚹ Marginal Revenue in Monopoly ⚹ ∻Explanation∻ ⚹ Marginal revenue is the additional revenue gained from selling one more unit of a good or service. In a monopoly, the marginal revenue is not equal to the price of the good because the monopoly must lower the price to sell additional units. ⚹◊What impact does the marginal revenue have on the pricing and production decisions of a monopoly firm like Mammoth, Inc.?⍭ Generate me a similar question◊

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