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A monopolist charges Rs. 30 for his product. He notices that elasticity in market A is 2 and elasticity in market B is 5.
Q. 
What will be the Marginal Revenue in Market B?
  • a)
    5
  • b)
    12
  • c)
    24
  • d)
    10
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
A monopolist charges Rs. 30 for his product. He notices that elasticit...
Marginal Revenue in Market B

Marginal Revenue is the additional revenue earned by a firm by selling one more unit of its product. In a monopolistic market, the marginal revenue is not constant and is influenced by the elasticity of demand.

Formula for Marginal Revenue: MR = P(1-1/E)

where P is the price of the product and E is the elasticity of demand.

Given that the monopolist charges Rs. 30 for his product and the elasticity in market A is 2 and elasticity in market B is 5.

Calculating Marginal Revenue in Market B:

MR = P(1-1/E)
MR = 30(1-1/5)
MR = 30(4/5)
MR = 24

Therefore, the Marginal Revenue in Market B is Rs. 24.

Answer: Option (c) 24
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Community Answer
A monopolist charges Rs. 30 for his product. He notices that elasticit...
MR=price[1-1/elasticity] =30(1-1/5) =24
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A monopolist charges Rs. 30 for his product. He notices that elasticity in market A is 2 and elasticity in market B is 5.Q.What will be the Marginal Revenue in Market B?a)5b)12c)24d)10Correct answer is option 'C'. Can you explain this answer?
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