A Monopoly Firm Can Sell 200 Units of Output for $36.00

question 226

Multiple Choice

A monopoly firm can sell 200 units of output for $36.00 per unit.Alternatively,it can sell 201 units of output for $35.50 per unit.What is the marginal revenue of the 201st unit of output

• A)-$35.50
• B)-$64.50
• C)$64.50
• D)$35.50

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Definitions:

Potential Level

The potential level of output, or potential GDP, is the maximum amount of goods and services an economy can produce when it is fully utilizing its resources, without causing inflation to rise.

Fixed-growth-rate Monetary Policy

A monetary policy framework aiming to maintain a predetermined rate of growth in the money supply.

Active Fiscal Policy

Government policy that involves altering government spending and taxation to influence the economy.

Short-run Phillips Curve

An economic model depicting an inverse relationship between the rate of unemployment and the rate of inflation in the short-term.