Suppose a monopolist producing self‑cleaning jackets can sell 20 jackets at $100 and 21 jackets at $98 . The monopolist is unable to price discriminate, so in order to sell a total of 21 jackets, the price per jacket must be $98 .
When charging $100 per jacket, total revenue is?
When charging $98 per jacket, total revenue is
So the marginal revenue of selling the 21 st jacket is
In the case of any firm facing a downward sloping demand curve, marginal revenue is always
equal to price.
less than price.
more than price.