Refer to the figure above. Which one of the 4 dashed lines represents the marginal revenue of this monopoly firm? Price108.76-Line 4Line 2Line 32.1.Line 1Demand3489.9 10 11 12 QuantityRefer to the figure above. Which of the four dashed lines represent the marginal revenueof this monopoly firm?54.3.

Answered: Refer to the figure above. Which one of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Refer to the figure above. Which one of the 4 dashed lines represents the marginal revenue of this monopoly firm?

Price
10
8.
7
6-
Line 4
Line 2
Line 3
2.
1.
Line 1
Demand
3
4
8
9.
9 10 11 12 Quantity
Refer to the figure above. Which of the four dashed lines represent the marginal revenue
of this monopoly firm?
5
4.
3.

Expert Solution

Marginal Revenue

Marginal revenue is the revenue that is received by a firm for an additional unit of output. Marginal revenue is calculated as difference between total revenue (Price x Quantity) at the new level of output and total revenue at the previous output.

Therefore, if

MR = Marginal Revenue

P1= Initial Price

P2 = Final Price

Q1 = Initial Quantity

Q2 = Final Quantity

MR= P2xQ2 - P1xQ1

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