A monopoly has the following pricing and revenue structure.
Calculating the Monopolist's Marginal Revenue
(1)
Quantity of
customers
(Q)
(2)
Price of
service
(P)
(3)
Total
revenue
(TR)
(4)
Marginal revenue
per 1,000 customers
(MR)
Formula:
$Q \cdot P$
$\leq TR$
0
$100
$0.00
$90,000
1,000
90
90,000
70,000
2,000
80
160,000
50,000
3,000
70
210,000
30,000
4,000
60
240,000
10,000
5,000
50
250,000
-10,000
6,000
40
240,000
-30,000
7,000
30
210,000
-50,000
8,000
20
160,000
-70,000
9,000
10
90,000
-90,000
10,000
0
0.00
If the firm's marginal cost per customer is $30, and the firm wants to follow the profit-maximizing
rule, what would be the firm's quantity of customers and price charged per customer?
The quantity of customers is 4,000, and the
price is $60.
The quantity of customers is 3,000, and the
price is $70.
The quantity of customers is 4,000, and the
price is $30.
The quantity of customers is 3,000, and the
price is $30.
