4 300 — —
a. Compute total and average revenue for each level of
output and fill in the third and fourth columns in the
table. Explain why average revenue is equal to price.
b. Compute marginal revenue for each successive change in
output and fill in the last column. Explain why MR is less
than price.
c. On a scale diagram, plot the demand (average revenue)
curve and the marginal revenue curve.
d. On a second scale diagram, with dollars on the vertical
axis and output on the horizontal axis, plot the TR curve.
What is the value of MR when TR reaches its maximum?
11. The diagram below shows the demand curve facing a single-price
monopolist. The firm is currently at point A on the demand curve,
selling 20 units of output at a price of $160 per unit.