A Monopolist Can Sell 300 Units of Output for $50

question 169

Multiple Choice

A monopolist can sell 300 units of output for $50 per unit. Alternatively, it can sell 301 units of output for $49.60 per unit. The marginal revenue of the 301^st unit of output is

• A)-$99.60.
• B)-$70.40.
• C)-$0.40.
• D)$70.40.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of values, representing how spread out the numbers are from the mean.

Correlation

A statistical measure that describes the extent to which two variables move in relation to each other, indicating the strength and direction of their relationship.

Optimal Risky Portfolio

An investment portfolio that aims to achieve the highest possible return for a given level of risk.

Capital Market Line

A line used in the Capital Asset Pricing Model to illustrate the rates of return for efficient portfolios subject to the risk (measured by standard deviation) compared to the risk-free rate of return.