Answer:
MR = 20 units
Explanation:
QUANTITY PRICE TOTAL REVENUE TOTAL COST
10 90 900 675
15 80 1200 825
20 70 1400 1025
25 60 1500 1250
30 50 1500 1500
35 40 1400 1850
If the firm is a monopoly, what is marginal revenue when quantity is 25?
First,
A monopoly is a one-firm or one-producer market. A monopolist is a price-giver (a firm that sets whatever price that suits them) not a price taker.
Second,
Marginal revenue is the extra revenue a firm gains, for selling an extra unit of their product. When it comes to calculation, it is the division of change in total revenue by change in quantity sold.
As seen in the table/arrangement above, the fourth quantity is 25 and the total revenue from selling 25 units is 1,500. The previous quantity is 20 and total revenue from selling 20 units is 1,400.
Change in Total Revenue = 1500 - 1400 = 100
Change in quantity sold = 25 - 20 = 5
MR = 100/5 = 20
This shows that the monopoly gains 20 units of money when it sells 5 extra units of product.
If you wish to compute this for A UNIT change in commodity sold, then MR is the extra revenue from selling an extra unit of product. So, cross multiply:
20 extra units of money - 5 extra units of commodity
X extra units of money - 1 extra unit of commodity
X = 20/5 = 4
I HOPE THE TWO ANSWERS ARE CLEAR.
