A monopolist’s demand curve is given by P = 100 – 2q.
(a) Find his marginal revenue function.
(b) At what price is marginal revenue zero
1
Expert's answer
2015-03-30T10:33:50-0400
(a). First of all it is necessary to calculate total revenue as a function of quantity. TR = P * Q= (100 – 2q)*q = 100q – 2q^2 So, the marginal revenue function can be calculating as derivative form total revenue: MR = d TR /d Q = 100 – 4q (b). If MR = 0 100 – 4q = 0 4q = 100 q = 25 P = 100 – 2q = 100 – 50 = 50
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