Exhibit 8-2 Demand and cost information for a monopoly
Q
P
TC
0
40
10
1
30
15
2
20
25
3
10
40
4
0
60
The marginal revenue of the second unit of output in Exhibit 8-2 is:
A. 10.
B. 20.
C. 30.
D. 40.
Answer: A
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When tastes are not quasilinear, the positive economist will introduce error into the analysis if he uses the uncompensated (rather than the compensated) demand curve to analyze changes in consumer surplus.
Answer the following statement true (T) or false (F)