Asked by Hunter McGaughey on May 16, 2024
Verified
If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit,the marginal revenue of the fifth unit is $5.
Marginal Revenue
Marginal revenue is the additional income generated from the sale of one more unit of a good or service.
- Understand how market dynamics, including demand elasticity, affect monopolistic pricing strategies and revenues.
Verified Answer
SA
Sinachi AnamdiMay 18, 2024
Final Answer :
True
Explanation :
Marginal revenue is the change in total revenue that results from selling one additional unit.
From the given information, the company sells 4 units per week at $10 per unit, so the total revenue for selling 4 units will be 4 x $10 = $40.
When the company sells 5 units per week at $9 per unit, the total revenue for selling 5 units will be 5 x $9 = $45.
Therefore, the marginal revenue of the fifth unit is $45 - $40 = $5.
Hence, the statement is true and the answer is A.
From the given information, the company sells 4 units per week at $10 per unit, so the total revenue for selling 4 units will be 4 x $10 = $40.
When the company sells 5 units per week at $9 per unit, the total revenue for selling 5 units will be 5 x $9 = $45.
Therefore, the marginal revenue of the fifth unit is $45 - $40 = $5.
Hence, the statement is true and the answer is A.
Learning Objectives
- Understand how market dynamics, including demand elasticity, affect monopolistic pricing strategies and revenues.
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