Asked by Ariel Kirkpatrick on Jul 23, 2024
Verified
Refer to Scenario 10.2. What level of output maximizes total revenue?
A) 0
B) 90
C) 95
D) 100
E) none of the above
Marginal Revenue
The increased earnings obtained from the sale of one extra unit of a product or service.
Total Cost
The total of all costs associated with the creation of products or services, encompassing both fixed and variable expenses.
Marginal Cost
The financial outlay for generating an additional unit of a good or service.
- Assess and calculate the monopolist’s highest profit-generating output and pricing, taking into account information on demand, costs, and marginal revenue.
Verified Answer
RC
Robert CreelJul 24, 2024
Final Answer :
D
Explanation :
Total revenue is maximized where marginal revenue (MR) equals zero. Setting MR = 0 gives 0 = 100 - Q, solving for Q gives Q = 100.
Learning Objectives
- Assess and calculate the monopolist’s highest profit-generating output and pricing, taking into account information on demand, costs, and marginal revenue.