Question

Netherlands in Autarky. Initially, in the Netherlands, demand for a specific brand' is character ized by: Q=Sxx [UPP)] where the size of the Dutch market is Sy = 336.2 million laptops, and the sensitivity of demand to prices is measured by the parameter b = 0.001. (1) What is the marginal revenue (MR) as a function of the price P and quantities Q of laptops produced by a single firm?

Answer 1

Question! - In Netherlands, demand for specific brand is given as d = SxS - - b (P-P)] Where Sy = Size of Dutch Market - 336.2 I b = Sensitivity of demand - 0.0011 to Price solution - 1 To find the Marginal Revenue, we should firstly know about the Total Revenue earned by a firem to preoduced the laptops. Since O = 2 * 7-b (P-P)] bulting all numerical values giren to us:- Q = 336.2 xf+ - 0.00) (P-P)] Now, formule to get Tobal Revenue (TR) is TR = Price & Quantity giren OR TR = P 336.2 [ + - 0.001 (PF)] - 3958 (4)P - (396.2 X0001(P) (P_P37

| R = 83 6.)- 09362 (P) ( P-8 7 8 - 336 375 P - Ô-33 62 P-0336 (PP) Now, get the marginal Revenue of a fiume MR d p = dp 336.2 P-0.3362 p?_0.3362 Pro MR = 336.2 - 2x0.3862 P – 0.336217) or MR = 336.2 - 0.6724 P - 0.33621731 Hence, this is the equation of marginal Revenue (MR) which is function of Price and Cuantity (8) of laptops produced by a single firm,