alleryA discriminating monopolist sets a single price of ₹ 30. In market A elasticity of demand is 2. Using MR = AR((e-1)/e), the marginal revenue in market A is:
A₹ 15
B₹ 24
C₹ 30
D₹ 45
Answer & Solution
Correct answer: A. ₹ 15
1. Apply MR = AR × ((e - 1) / e) with AR = ₹ 30 and e = 2.
2. Compute the bracket: (2 - 1) / 2 = 1/2.
3. MR = 30 × 1/2 = ₹ 15.
4. So the marginal revenue in market A is ₹ 15.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 4 Unit III "Price-Output Determination under Different Market Forms", p.16_
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