Question #107884

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?

What is the marginal revenue when quantity is 4?

What is the marginal revenue when quantity is 4?

Expert's answer

Solution:

"MR=30(1-\\frac {1}{3})"

"E_d=Q_d^{\/}\\times \\frac {p}{Q}"

"-3= Q_d^{\/}\\times \\frac {30}{2}"

"Q_d^{\/}=-0.2"

If q=4

"p=60"

"MR=60(1-\\frac {1}{3})"

"MR=40"

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