The table below shows the quantity produced and the price set by a monopoly firm. Based on the table, the marginal revenue of the 28thunit of output is
A. $14.50
B. -$13.50
C. -$16.50
D. $16.50
E. $13.50
Answer: B. -$13.50
In the question above, in order to calculate Marginal Revenue, we need to first identify Total Revenue, Total Revenue = Price x Quantity.
A company calculates marginal revenue by dividing the change in total revenue by the change in total output quantity. Marginal revenue is the additional revenue generated by increasing product sales by one unit.
In the case, Marginal Revenue of 28th Unit from the 27th Unit is $756.00 - $769.50 = - $ 13.50
Which implies that revenue decreased by $13.50 by increasing output from 27th to 28th Unit.
Calculations in the table below:
| Quantity | Price | Total Revenue (QXP) | Marginal Revenue |
| 27 | $28.50 | $769.50 | |
| 28 | $27.00 | $756.00 | $-13.50 |
| 29 | $25.50 | $739.50 | $-16.50 |
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