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.
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.
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. (Round all values to the nearest increment of 20.)
Comparing your total revenue graph to your marginal revenue graph, you can see that when total revenue is increasing, marginal revenue is _______
Ans:
Explanation:
Total revenue = Price * Q
Quantity ( Number of units) |
Price ( Dollars per unit) |
Total Revenue ( Dollars) |
0 | 100 | 0 |
10 | 80 | 800 |
20 | 60 | 1200 |
25 | 50 | 1250 |
30 | 40 | 1200 |
40 | 20 | 800 |
50 | 0 | 0 |
Ans:
Total revenue when firm produces 10 units = 80 * 10 = $800
Total revenue when firm produces 9 units = $82 * 9 =$738
Marginal revenue of 10th unit produced = ($800 - $738) / ( 10 - 9)= $62
Total revenue when firm produces 20 units = 60 * 20 = $1200
Total revenue when firm produces 19 units = $62 * 19 =$1178
Marginal revenue of 20th unit produced = ($1200 - $1178) / ( 20 - 19)= $22
Explanation:
Marginal Revenue = Change in Total revenue / Change in Quantity
Ans:
Explanation:
Quantity ( Number of units) |
Price ( Dollars per unit) |
Total Revenue ( Dollars) |
Marginal Revenue ( Dollars) |
0 | 100 | 0 | -- |
10 | 80 | 800 | 80 |
20 | 60 | 1200 | 40 |
25 | 50 | 1250 | 10 |
30 | 40 | 1200 | -10 |
40 | 20 | 800 | -40 |
50 | 0 | 0 | -80 |
Ans: When total revenue is increasing , marginal revenue is decreasing.
All figures and calculations are correct except the last graph MARGINAL REVENUE. Only plot two points because instruction state "Round all values to the nearest increment of 20."
= (x,y) = (10,62) becomes (10,60)
= (x,y) = (20,22) becomes (20,20)
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.
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. On the graph input tool, change the number found in the Quantity Demanded need...
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.On the graph input tool, change the...
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. On the previous graph, change the number found in the Quantity Demanded field to...
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. On the graph input tool, change...
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...
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. On the graph input tool, change the number found in the Quantity Demanded field to...
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...
The Marginal Revenue/ Quantity MUST be a straight line 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...
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
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 Quantit 25 Demanded (Units) Demand Price...