Question

E O words </> Question 6 5 pts The demand for watches is given by: Q (p) = 160 - 4p, where p is the price of a watch. Calculate the revenue maximizing price for the firm that sells watches to charge for watches. D Question 7 5 pts The demand function for watches is: Q (P) = 160 - 4p, where p is the price of a watch. Calculate the marginal revenue at output level () equal to 20.

Answer 1

Q6 P = 160-4 Q .....(i)

R= P*Q

Putting eq (i) in R= P*Q

R= (160 - 4q) * q

R(q)= 160 q - 4q2

level of production to maximize revenue we need to find derivative of revenue function

R(q)= 160 -8q

8q = 160

q= 160/8 .......q= 20

Input this function into our demand function

P= 160- 4 (20)

= 160 -80

= 80.

Q7 marginal revenue at  q= 20

Revenue function = R(q)= p* q

R(q)= 160- 4q *q

= 160 - 4q2

marginal revenue R'(q) = dR/dx = 160 - 8q

Marginal revenue at q= 20

R'(20)= 160- 8(20)

= 160 - 160

= 0