Question

Derivation and Plots of Demand, Marginal Revenue, and Revenue Curves Name Due (worth 50 points) 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. Q = 40000-100P, 2) The price function is the inverse of the demand function. Write this inverse below. to 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. RAVENTS (M) 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). 5) Use the TR function (3) to calculate revenue for each of the seven la values below. Use the seven revenues to plot the revenue function properly. Lo Revenue 0 10k 15k 20k 25k 30k 40k k means thousand 10X 10K

Answer 1

As per the HOMEWORKLIB POLICY, answering the first four questions

1)

T Ф. - Yo, ooo - Ioor, | Фxl о чоооо ПРx| ҷоо о & DD function ток зок Зок чок Фу»

2)

Qx = 40000 - 100Px

100Px = 40000 - Qx

Px = 400 - 0.01Qx : Inverse Demand Function

3)

TR = P*Q

= (400 - 0.01Qx ) * Qx

= 400Qx - 0.01Qx2

4)

MR = Derivative of TR with respect to Qx

= 400 - 0.02Qx

TR= 4000x-.010² [TR • 3817 87 13T) I oxlol 10 20 30 60007 - TR 40 5000f yooo 3000 MR = 400 - 0.02 Qx MR 1 400 399.8 399.6 I axl.ol10 20 2000+ 1000 л MR 10 20 30 úo