GRAPH THIS

All items expressed in $ ( price P, marginal revenue MR, marginal cost MC) are shown on the vertical axis.

Quantity is shown along the horizontal axis.

i The inverse demand curve is P = 50-0.001Q

The demand line is drawn from the vertical axis starting at an intercept of 50 and declining all the way to a quantity of 25,000 on

the horizontal axis. The demand curve's slope is -0.001

ii. The marginal revenue line is: MR = 50-0.002Q

The MR has the same intercept as the demand but declines at twice the rate of the demand.

Therefore it starts at 50 and drops down to produce the quantity intercept of 12,500. It has a slope of -0.002

iii. Marginal cost MC = 20

The marginal cost is a horizontal line drawn at 20.