If the demand equation is P = 30-2Q and the marginal cost of the provided service...
Homework Answers
Maximum front fee can be determined at a point where marginal revenue equals marginal cost.
Total revenue = price * quantity
= (30-2Q)Q
= 30Q-2Q^2
Marginal revenue = 30-4Q
MR= MC
30-4Q= 2
28= 4Q
Q = 28/4
Q = 7
P = 30-2Q
= 30-2(7)
= 16
Thus, maximum up front fee charged from each member is $16.
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the demand equation is P = 30-2Q and the marginal cost of the
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