0 $800 700 500 6. If a firm that is able to price discriminate produces and sell
ID: 1111621 • Letter: 0
Question
0 $800 700 500 6. If a firm that is able to price discriminate produces and sells 3 units, it will receive total revenue equal to: a. $300. b. $500. c. $1,500. d. $1,800. 7. If a firm that is not able to price discriminate produces and sells 3 units, it will receive total revenue equal to: a. $300. b. $500. C. Use the following table to answer questions 8 through 10. Price per unit $50 Quantity Demanded 30 20 10 4 . For a monopolist that is able to price discriminate, selling 4 units brings in total revenue of ; for a monopolist that is unable to price discriminate, selling 4 units brings in total revenue of . a. $40; $40 b. $100; $100 c. $40; $100 d. $100; $40 . For a monopolist that is unable to price discriminate, the marginal revenue of the 3d unit isand the marginal revenue of the 4th unit is a. $0; $20 c. $20; $0 d. $0;-$20 b. $20; $10 0. For a monopolist that is able to price discriminate, the marginal revenue of the 3rd unit s- _ and the marginal revenue of the 4th unit is a. $O; -$20 b. $20; $10 c. $20; $0 d. $30; $20Explanation / Answer
Answer (6) - A firm, able to price discriminate will charge price equal to price that consumer is willing to pay. In the question consumer is willing to pay $700 for first unit, $600 for second units and $500 for third units. Total revenue that firm will equal to the sum of three units willingness price.
TR = 700+600+500
TR = $1800
Option D is the correct answer.
Answer (7) - If firm is not able to price discrimination then it will charge $500 for each unit.
TR = 500 *3
TR = $1500
Option C is the correct answer.
Answer (8) - The monopolist is able to price discriminate thus it will charge price equal to willingness price. Monopolist sells 4 units in the market. Total revenue will equal to,
TR = 40 + 30 + 20 + 10
TR = $100
If monopolist is not able to price discriminate then it will charge same price for all units. It will charge $10 each.
TR = 10 *4
TR = $40
Option D is the correct answer.
Answer (9) - Suppose consumer purchase first units at price $40, this is total revenue. Now if it purchases 3rd unit then total revenue $20 will increase. Marginal revenue is the change in total revenue due to sell an additional unit of good. If it purchases 3rd unit then it charges $20 each thus MR would $20 for 3rd unit. If it sells 4th units they price would be $10 for each. Thud MR for 4th units is $10.
Option C is the correct answer.
Answer (10) - The monopolist is able to price discriminate. According to the table, total revenue from first to 4th unit, $40, $60, $60 and $40 respectively.
Thus MR of third unit is Zero (0) and MR for 4th units is (-20).
Option A is the correct answer.
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