Consider a Monopolist Selling Her Output in Two Markets,A and B.The

question 76

Multiple Choice

Consider a monopolist selling her output in two markets,A and B.The price elasticity of demand in market A is 1.5,while the same in market B is 2.5.Calculate the marginal revenue [MR] from each market,if the monopolist charges $300 for the product in both the markets.

• A)MR_A = 13.3;MR_B = 24.8
• B)MR_A = 6.11;MR_B = 35.8
• C)MR_A = 11.11;MR_B = 64.8
• D)MR_A = 15.3;MR_B = 74.8

---

Definitions:

Du Pont Identity

A formula that breaks down return on equity into three component parts: profit margin, asset turnover, and financial leverage.

Profit Margin

A financial ratio that shows the percentage of revenue that exceeds the cost of goods sold, indicating the efficiency of a company in generating profit.

Operating Profit Margin

A profitability ratio calculated as operating income divided by revenue, indicating the percentage of revenue that is left over after paying for variable costs of production.

Cost of Goods Sold

Expenses directly incurred from the production of a company's sold goods, involving the cost of labor and materials.