Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.Graph Input Tool ? Market for Goods 150 135 Quantity 25 Demanded 120 (Units) 105 Demand Price 75.00 (Dollars per unit) 90 75 PRICE (Dollars per unit) 45 Demand 30 15 0 10 15 20 25 30 35 40 45 50 QUANTITY (Units)On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 10, 20, 25, 30, 40, and 50 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. 1880 A 1602 Total Revenue 1504 1316 1128 940 TOTAL REVENUE (Dollars) 752 584 376 188 5 10 15 20 25 30 35 40 45 50 QUANTITY (Number of units)Calculate the total revenue if the firm produces 10 versus 9 units. Then, calculate the marginal revenue of the 10th unit produced. The marginal revenue of the 10th unit produced is $ Calculate the total revenue if the firm produces 20 versus 19 units. Then, calculate the marginal revenue of the 20th unit produced. The marginal revenue of the 20th unit produced is $ Based on your answers from the previous question, and assuming that the marginal revenue curve is a straight line, use the black line (plus symbol) to plot the firm's marginal revenue curve on the following graph. 150 + 135 120 Marginal Revenue 105 75 MARGINAL REVENUE (Dollars) 60 -15 30 5 10 15 20 25 30 35 40 45 50 QUANTITY (Units)-30 10 15 20 25 30 35 40 45 50 positive QUANTITY (Units) negative equal to zero total revenue graph to your marginal revenue graph, you can see that when total revenue is increasing, marginal revenue is

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How The Old World Ended The Anglo-Dutch-American Revolution 1500-1800

Authors: Jonathan Scott

1st Edition

0300249365, 9780300249361

More Books

Students also viewed these Economics questions

Question

Dont smell (i.e., too much perfume/cologne).

Answered: 1 week ago

Question

How frequently may an Archer MSA be rolled over

Answered: 1 week ago

Question

What does this look like?

Answered: 1 week ago