Asked by Aliya leblanc on Jul 08, 2024
Verified
if demand for the book is Q 2,000 300p, the marginal revenue function is given by
A) 300.
B) 6.67 Q/150.
C) 2,000 600.
D) 6.67Q Q2/300.
E) 1/300.
Marginal Revenue Function
A calculation used to determine the additional revenue generated by selling one more unit of a good or service.
Demand
An economic principle referring to the consumer's desire and willingness to pay for a specific quantity of a good or service at a given time.
Book
A published material that features pages bound together on one side and encased within protective covers.
- Comprehend the principles of demand functions and their connection to price and quantity.
Verified Answer
HM
Hayro MoralesJul 14, 2024
Final Answer :
B
Explanation :
The marginal revenue function for a linear demand function is given by MR = p(1 - 1/|E|), where E is the price elasticity of demand. In this case, E = -/ = -2000/300 = -6.67. Therefore, MR = p(1 + 1/6.67) = 7.67p. Solving for Q in terms of p and MR, we get Q = (150/6.67)(MR - 300). Substituting the expression for MR, we get Q = (150/6.67)(7.67p - 300) = 10,899p - 263,736/3. Therefore, the marginal revenue function is given by MR = dQ/dp = 10,899. Since this is closest to option B, that is the best choice.
Learning Objectives
- Comprehend the principles of demand functions and their connection to price and quantity.