In: Economics
When the monopoly firm sells two units of its product, it earns total revenue of $260 and it incurs a total cost of $210. If its marginal revenue for the second unit was $110, what was the marginal revenue of the first unit?
Group Choice Answers:
$100
$150
$133
$220
There is not enough information to answer the question.
Total revenue is the total of marginal revenue
TR=MR
TR(2)=MR(1)+MR(2)
260=MR(1)+110
MR(1)=260-110=150
The marginal revenue of the first unit is $150
Option 2