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 transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image 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 8 8 Quantity Demanded (Units) Demand Price (Dollars per unit) 8 50.00 8 CE (Dollars per unit) 3 % Graph Input Tool Market for Goods 25 Quantity Demanded (Units) Demand Price (Dollars per unit) 50.00 PRICE (Dollars per unit) Demand 0 5 10 40 45 50 15 20 25 30 35 QUANTITY (Units) mework ( 15) in 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, 0, 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 moints (triangle symbol) to plot the results. Total Revenue TOTAL REVENUE (Dollars) 1250 - 1125 1000 + Total Revenue TOTAL REVENUE (Dollars) 0 + 0 5 10 15 20 25 30 35 QUANTITY (Number of units) 40 45 50 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 S 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 to plot the firm's marginal revenue curve on the following graph. is a straight line, use the black line (plus symbol) increment of 20.) + Marginal Revenue MARGINAL REVENUE (Dollars) 200 0 5 10 15 35 20 25 30 QUANTITY (Units) 40 45 50 at the output at which Comparing your total revenue graph to your marginal revenue graph, you can see that total revenue is marginal revenue is equal to zero

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

Step: 3

blur-text-image

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

Automotive Process Audits Preparations And Tools Practical Quality Of The Future

Authors: D. H. Stamatis

1st Edition

036775939X, 978-0367759391

More Books

Students also viewed these Accounting questions