The demand and marginal cost equations below represent those faced by a monopolist in the market for lunar exploratory vehicles. D: Qd = (minus 1/2) P + 10,000 MC: MC = 2Q + 50 What equation best represents the firm's marginal revenue?

Question

Business

Joy Greer

2 March, 05:15

The demand and marginal cost equations below represent those faced by a monopolist in the market for lunar exploratory vehicles. D: Qd = (minus 1/2) P + 10,000 MC: MC = 2Q + 50 What equation best represents the firm's marginal revenue?

+1

Answers (1)

Know the Answer?

Joaquin Tran · Answer 1

MR = - P + 10,000

Explanation:

Qd = (-1/2) P + 10,000 ... (1)

Total Revenue = TR = P. Qd = P[ (-1/2) P + 10,000]

TR = P[ (-1/2) P + 10,000) ] = (-1/2) P^2 + 10,000P ... (2)

To obtain MR, equation 2 is differentiated with respect P as follows:

MR = TR' = - P + 10,000

Therefore, the best equation to represent the firm's marginal revenue (MR) is MR = - P + 10,000.