# Marginal revenue the change in total revenue

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Chapter 25 / Exercise 11
Exploring Economics
Sexton
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Marginal revenue= the change in total revenue resulting from a one-unit increase in the quantity sold.So for example, when the quantity of balloon rides sold increases from 2 to 3 a month, total revenue increases from \$360,000 to \$480,000Margin revenue= (480,000 – 360,000) / (3-2) = 120,000 / 1 = 120,000Price(thousands of dollars per ride)Quantity(rides per month)Total costTotal revenueMarginal revenue(thousands of dollars per rideride)(thousands of dollars per month)2200800200 (200 – 0)2001160200 (200 *1)160 (360 – 200)1802260360 (180 * 2)120 (480 – 360)1603380480 (160 * 3)80 (560 – 480)
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Chapter 25 / Exercise 11
Exploring Economics
Sexton
Expert Verified
1404520560 (140 * 4)40 (600 – 560)1205680600 (120 * 5)18. 19. Major league baseball is exempt from laws designed to limit market power and it operates as a monopoly.If the baseball market became competitive, the number of teams would __increase____ and the economic profit of each team would___
20. For each of the following situations in California, indicate whether or not it is an example of price discrimination.yesThe weekend price of a hotel room is greater than the mid-week price.
Stand-by passengers can fly at lower fares than passengers who buy etickets.
Colleges charge out-of-state students a higher tuition than Californian students.
A cruise line sells the second cruise booked within a year at a 20% discount.
A bank charges a higher interest rate on a car loan than it charges the same person for a student loan.
The price of water is higher for a car wash firm than it is for a farmer.
A cell phone company offers free calls on the weekend.
A gold course offers discounts to senior citizens.
21. Which of the following is an example of a price cap regulation?
22. A firm is a natural monopoly ifit can satisfy the market demand at a lower average total cost than other firms can