Question

The equation below represents a linear demand curve. Use the grid (right) for your plots. Write all derivations in the space below. 1) Plot the demand function on the top set of axes. Qy = 15000 – 200P, 2) The price function is the inverse of the demand function. Write this inverse below. 3) Use the price function to obtain the total revenue function (TR). Write the TR function below. You will plot TR on the lower set of axes in step 5. ak 6K 7.5k 9K 4) Derive (or simply write) the marginal revenue (MR) function below. Plot MR on the top set of axes in the proper location with respect to the demand function) REVENUE ($odo) 300 5) Use the TR function (3) to calculate revenue for each of the seven Qx values below. Use the seven revenues to plot the revenue function properly. O Revenue | 7.5k 9k 12k | 15k k means thousand Demand_MR_TR_plots 12.doc September 7, 2016 BIS Cik 25% 9% 2% 15%

Answer 1

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the solution of the above questions are:

1) plot the graph Qx = 15000 + 200*Px

Demand Price 0 2000 4000 6000 10000 12000 14000 16000 8000 Quantity

2). inverse demand function :

Qx = 15000 - 200*Px

200*Px = 15000 - Qx

Px = (15000/200) - Qx/

Px = 75 - (Qx/200) inverse demand function

3). Total Revenue Function

TR = Px*Qx

Px = 75 - (Qx/200)

TR = Qx{75 - (Qx/200)}

TR = 75*Qx - (Qx2/200)

4).Marginal Revenue Function

it diffrenctiation of Total Revebue function

MR = d(TR)/d(Qx)

MR= d(75*Qx - (Qx2/200))/d(Qx)

MR = 75 - (2Qx/200)

MR = 75 - (Qx/100)

5). the Revenue value on seven Qx values

put Qx value in TR function 75*Qx - (Qx2/200)

Quantity	Revenue
0	0
3k	180000
6k	270000
7k	281250
9k	270000
12k	180000
15k	0

Revenue 300000 250000 200000 Revenue 150000 100000 50000 O 2000 4000 6000 10000 12000 14000 16000 8000 Quantity