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# Perfect Competition & Monopoly

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Please use the attached scenario and help me answer the three questions below.

Identify the marginal revenue and marginal cost for each additional car that pays to use the bank's parking lot

Explain why the bank is able to set the fees as high as they are

Contrast the current fee with the likely fees if there was ample, convenient parking available at all times

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#### Solution Preview

Perfect Competition & Monopoly

Please use the attached scenario and help me answer the three questions below.

Identify the marginal revenue and marginal cost for each additional car that pays to use the bank's parking lot
Marginal revenue is the increase in total revenue resulting from one unit change in sales. In this case each additional car parked brings in the additional revenue of \$10. So the marginal revenue is \$10.
Similarly, the increase or decrease in costs as a result of one more or less unit of output is called marginal cost. In this case the bank has clarified that additional usage will increase maintenance costs for the parking ...

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This answer provides you an excellent discussion on Perfect Competition & Monopoly

\$2.19