result, the marginal cost of the second unit will be:

Step 3. Remember that, similarly, marginal revenue is the change in total revenue from selling a small amount of

additional output.

Step 4. Note that in Table 9.3, as output increases from 1 to 2 units, total revenue increases from $1200 to

$2200. As a result, the marginal revenue of the second unit will be:

Quantity

Marginal Revenue

Marginal Cost

Marginal Profit

Total Profit

Q

MR

MC

MP

P

1

2

3

4

1,200

1,000

800

600

500

275

225

250

700

725

575

350

700

1,425

2,000

2,350

TABLE 9.4 Marginal Revenue, Marginal Cost, Marginal and Total Profit

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9.2 • How a Profit-Maximizing Monopoly Chooses Output and Price 227

Quantity

Marginal Revenue

Marginal Cost

Marginal Profit

Total Profit

Q

MR

MC

MP

P

5

6

7

8

400

200

0

−200

400

850

1,500

2,400

0

−650

2,350

1,700

−1,500

200

−2,600

−2,400
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