Question

USLUNU=24&tus Econ 121, Fall 2019, 6776 (Online) Sod Homework: HW Ch. 13 rScore: 0 of 1 pt 4 of 40 (30 complete) End of Chapter 1.10 S Sally runs a vegetable stand. The following table shows two points on the demand curve for the heirloom tomatoes she sells Price $4,50 $325 Quantity demanded per week 100,000 200.000 Sally's marginal revenue from lowering the price of tomatoes from $4.50 to $3.25 is $ (Enter your response rounded to two decimal places)

Answer 1

Total revenue (TR) = P x Q

When Price = 4.5, TR = 4.5 x 100,000 = 450,000

When Price = 3.25, TR = 3.25 x 200,000 = 650,000

Marginal revenue = Change in TR / Change in Q = (650,000 - 450,000) / (200,000 - 100,000) = 250,000 / 100,000

= $2.50