Question
(Table: Prices and Demand) The New Orleans Saints have a monopoly on Saints logo hats. The...
(Table: Prices and Demand) The New Orleans Saints have a monopoly on Saints logo hats. The marginal cost of producing a hat is $18. If the Saints increase the number of hats they sell from 4 to 5, marginal revenue is:
$8.
$20.
$22.
$12.
Table: Prices and Demand Quantity of Hats Price Demanded Der Hat $30
Answers
Answer : The answer is option D.
Total revenue = Price * Quantity
For 4 hats the total revenue = 22 * 4 = $88
For 5 hats the total revenue = 20 * 5 = $100
Marginal revenue = Total revenue of 5 hats - Total revenue of 4 hats = 100 - 88 = $12
Therefore, option D is correct.
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