Suppose the Accompanying Table Describes the Relationship Between Price and Quantity

question 117

Multiple Choice

Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist.  
$$\begin{array} { | c | c | } \hline \text { Quntity } & \text { Price } \\\hline 1 & \$ 10 \\\hline 2 & \$ 9 \\\hline 3 & \$ 8 \\\hline 4 & \$ 7 \\\hline 5 & \$ 6 \\\hline 6 & \$ 5 \\\hline 7 & \$ 4 \\\hline 8 & \$ 3 \\\hline\end{array}$$ The marginal revenue of the third unit of output is:

• A)$24.
• B)$8.
• C)$6.
• D)?$1.

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Definitions:

Fixed Rate

An interest rate that remains unchanged throughout the entire term of the loan, mortgage, or bond.

Derivative Security

A financial security whose value is dependent upon or derived from one or more underlying assets.

Hedging

Reducing a firm’s exposure to price or rate fluctuations. Also immunization.

Economic Exposure

The risk that a company's cash flow, earnings, or future value will be affected by changes in exchange rates.