Josalmina Company is a pure monopolist with fixed costs of $ The following graph and revenue and cost information are relevant to its operations: Josalmina’s marginal revenue is zero at what output level? A. 4 units. B. 6 units. C. 7 units. D. 11 units.
Answer (D) is correct . Marginal revenue (MR) equals the additional total revenue from selling one additional unit. At an output of 10 units, total revenue (TR) is $2,200 (10 ¡Á Answer (A) is incorrect because At a level of 4 units, MR is $280. Answer (B) is incorrect because At a level of 6 units, MR is $200. Answer (C) is incorrect because At a level of 7 units, MR is $160.