Question

 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 to determine the prices that correspond to the production of o, 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 or 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 nevenue 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 30.)

 Comparing your total revenue graph to your marginal revenue graph, you can see that total revenue is _______  at the output at which marginal revenue is equal to zero.

Answer 1

Ans:

Explanation:

Total revenue =Price * Quantity

Quantity ( Units)	Price ( $)	Total Revenue ( $)
0	150	0
10	120	1200
20	90	1800
25	75	1875
30	60	1800
40	30	1200
50	0	0

Ans: The marginal revenue of the 10th unit produced is $93

Explanation:

When 9 units produced , total revenue = $123 * 9 = $1107

When 10 units produced , total revenue = $120 * 10 = $1200

Marginal revenue = Change in total revenue / Change in quantity

= ( 1200 - 1107) / ( 10 - 9) = $93 / 1 = $93

Ans: The marginal revenue of the 20th unit produced is $33.

Explanation:

When 19 units produced , total revenue = $93 * 19 = $1767

When 20 units produced , total revenue = $90 * 20 = $1800

Marginal revenue = Change in total revenue / Change in quantity

= ( 1800 - 1767) / ( 20 - 19) = $33 / 1 = $33

Ans:

Explanation:

Quantity ( Units)	Price ( $)	Total Revenue ( $)	Marginal Revenue ( $)
0	150	0
10	120	1200	120
20	90	1800	60
25	75	1875	15
30	60	1800	-15
40	30	1200	-60
50	0	0	-120

Ans: Total revenue is maximum at the output at which marginal revenue is equal to zero.