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QUESTION 4 Citra City, the movie market is monopolistically competitive. In the long run, demand for movies at the Gold Screen theatre is given by
QUESTION 4 Citra City, the movie market is monopolistically competitive. In the long run, demand for movies at the Gold Screen theatre is given by the equation: P = 5.00 - 0.002Q where Q is the number of paid admissions per month. The average cost function is given by: AC = 6.00 - 0.004Q + 0.000001Q2 a) Derive the marginal revenue (MR) and marginal cost (MC) functions. (4 m) MR = TR = P x Q = (5.00 - 0.002Q) Q = 5.00Q - 0.002Q2 dTC / dQ = 5.00Q - 0.002Q2 = 5.00 - 0.004Q MC = dTC / dQ AC = TC / Q TC = AC x Q = (6.00 - 0.004Q + 0.000001Q2) Q = 6Q - 0.004Q2 + 0.000001Q3 dTC / dQ = 6Q - 0.004Q2 + 0.000001Q3
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