Price per unit Quantity demande(Units) Total cost of production $200 1 $200 180
ID: 1258535 • Letter: P
Question
Price per unit Quantity demande(Units) Total cost of production
$200 1 $200
180 2 300
160 3 350
140 4 360
120 5 375
100 6 395
80 7 425
A monopoly producer of a foreign language translation software package faces the demand and cost structure
What is the marginal revenue from the sale of the third unit?
Explanation / Answer
Following is the Total Revenue Schedule –
Price
Quantity demanded
Total Revenue
(Price * Quantity demanded)
$200
1
$200
180
2
360
160
3
480
140
4
560
120
5
600
100
6
600
80
7
560
Calculate marginal revenue from sale of 3rd unit (MR3) –
MR3 = Total Revenue from sale of 3 units – Total Revenue from sale of 2 units
= $480 - $360
= $120
Thus, the marginal revenue from sale of 3rd unit is $120.
Price
Quantity demanded
Total Revenue
(Price * Quantity demanded)
$200
1
$200
180
2
360
160
3
480
140
4
560
120
5
600
100
6
600
80
7
560
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