Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I am not understanding this diagram about the elasticity and the marginal revenue, please explain this step by step , thanks ! E? t 3

I am not understanding this diagram about the elasticity and the marginal revenue, please explain this step by step , thanks !

image text in transcribed
E? t 3 51\".. CL. 0 (units/wk) FIGURE 13.6 Marginal Revenue and Position on the Demand Curve When Q is to the left of the midpoint (M) of a straight-line demand curve (for example, Q = Q0), the gain 'om added sales (area B) outweighs the loss 'om a lower price for existing sales (area A). When Q is to the right of the midpoint (for example, Q = Q1), the gain 'om added sales (area D) is smaller than the loss 'om a lower price for existing sales (area C). At the midpoint of the demand curve, the gain and the loss are equal, which means marginal revenue is 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

Public Relations

Authors: Tom Kelleher

1st Edition

0190201479, 9780190201470

More Books

Students also viewed these Economics questions

Question

Discuss why succession planning is essential to the future.

Answered: 1 week ago

Question

2. Find five metaphors for communication.

Answered: 1 week ago