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If a firm holds a pure monopoly in the market and is able to sell 4 units of output at a price of $2.00 per unit and 5 units of output at $1.75 per unit, it will produce and sell the fifth unit only if the marginal cost of producing the fifth unit is.____________

Respuesta :

If the marginal cost of producing the fifth unit is $0.75 or less.

Explanation:

In a trading market, monopoly means a company is selling the unique product with no competition. The company will be the single seller and he will have no opponent as he is the sole seller. This let the company to decide the price of his product with whole freedom.

Fixing the selling price of the product in the market is a great deal. It should be decided correctly in such a way that there should be no loss for the company.

The selling cost of the product is determined based on the marginal cost of the product and demand of the product in the market.

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