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?
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Expert's answer
2015-03-10T10:16:27-0400
a. We can construct the marginal revenue function by calculating total revenue as a function of quantity and then taking the derivative. TR = P * Q= (100 – 2q)*q = 100q – 2q^2 So, the marginal revenue function can be calculating as follows: 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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