Suppose That the Only Café in Town Can Sell Five

question 237

Multiple Choice

Suppose that the only café in town can sell five fish dinners per night at a price of $10 each. If this monopoly firm wants to sell six fish dinners, it must reduce the price to $9 each. When the business pursues this strategy to increase sales, the marginal revenue from the sixth dinner sold is

• A) $54.
• B) $50.
• C) $9.
• D) $4.