A monopolist knows that in order to expand the quantity of output it produces from 8 to

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A monopolist knows that in order to expand the quantity of output it produces from 8 to 9 units it must lower the price of its output from $2 to $1. Calculate the quantity effect and the price effect. Use these results to calculate the monopolist's marginal revenue of producing the 9th unit. The marginal cost of producing the 9th unit is positive. Is it a good idea for the monopolist to produce the 9th unit?
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Microeconomics

ISBN: 978-1429283434

3rd edition

Authors: Paul Krugman, Robin Wells

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