Answer to Question #182716 in Microeconomics for leena hashmi

Question

Please answer asap I need this.

A photocopy shop in a monopolistically competitive market could daily sell 5,000 copies at a price of 6 cents, or it could sell 7,500 copies at a price of 5 cents.

a. The marginal revenue associated with this range of the business's demand curve is  cent(s).

b. Because this business is a monopolistic competitor, marginal revenue is  

(Click to select)  price.

   options: less than, equal tom greater than

c. . Draw the relevant range of this business's demand curve and identify a point on its marginal revenue curve (graph).

plesse answer asap before april 20 2019.

 

Answer 1

(a) demand curve

$∆y/∆x$

$∆y=5-6=-1$

$∆x=7500-5000=2500$

$\frac{-1}{2500}=-0.0004$

$P=b-0.0004Q$

Substitute to get b

$6=b-5000(0.0004)$

$b=8$

Demand curve Will be

$P=8-0.0004Q$

Total Revenue = Price × Quantity

Marginal Revenue = Change in Total Revenue ÷ Change in Quantity

Total Revenue at 5000 Copies = 6 cents × 5000 = 30,000 cents

Total Revenue at 7500 Copies = 5 cents ×7500 = 37,500 cents

Marginal Revenue $= (37,500 - 30,000) / (7500 - 5000)$

$=\frac{ 7500 }{ 2500}$

$= 3 cents.$

(b) marginal revenue is less than the price.

(C)