Respuesta :
Answer:
The marginal cost should be $3.40 or less.
Explanation:
At price $4, the firm is able to sell 5 units.
At price $3.9, the firm is able to sell 6 units.
The total revenue at price $4
= [tex]Price\ \times\ Quantity[/tex]
= [tex]\$ 4\ \times\ 5[/tex]
= $20
The total revenue at price $3.9
= [tex]Price\ \times\ Quantity[/tex]
= [tex]\$ 3.9\ \times\ 6[/tex]
= $23.4
Marginal revenue is the additional revenue generated from selling one more unit of output.
Marginal revenue for sixth unit
= $23.4 - $20
= $3.4
A monopoly firm produces at the level where the marginal cost is either either equal to less than marginal revenue so that firm is not having a loss.
So here, the marginal cost should be $3.4 or less.
