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29 July, 08:28

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is a. - $120.00. b. - $75.40. c. - $0.40. d. $75.40.

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  1. 29 July, 08:57
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    b. - $75.40.

    Explanation:

    Given;

    Sale of 300 units of output for $45 per unit.

    Sale of 301 units of output for $44.60

    Difference in revenue earnings = 301 * 44.60 - 300 * 45

    = 13424.6 - 13500

    = - 75.40

    The sale of 301 units and 300 units at $44.60 and $45 respectively results in a marginal revenue of $75.40 (drop).

    b is the right option.
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