When a Certain Monopoly Sets Its Price at $8 It

question 152

Multiple Choice

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 60 units. The marginal revenue for the firm over this range is

• A)$11.
• B)$22.
• C)$33.
• D)$44.

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Definitions:

Intrinsic Value

The actual, fundamental value of an asset, determined through analysis without reference to its market value.

Warrant

A security that gives the holder the right to purchase shares of stock at a fixed price over a given period of time.

Option Agreement

A contract that grants the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.

Warrant

A financial instrument that gives the holder the right, but not the obligation, to buy shares of a company at a specific price before a certain date.