Answer to Question #106423 in Macroeconomics for George Mwila Chola

Question

You are given that the equilibrium price and quantity of a product A are $30 and 2Kg respectively. What is the marginal revenue when the price elasticity of demand is -3?

Answer 1

P=$30

Q=2kg

Ped= -3

The marginal revenue,$Mr=\frac{P}{Qs}$

$Qs=2\times-3$ = -6

Mr=30/-6= -5