Question

Suppose the demand function is given as q = 50000 -25000p, where p is the price in dollars and 0 < p < 2. when price is equal to $1.50, marginal revenue is equal to

Answer 1

To calculate the marginal revenue when the price is $1.50, differentiate the total revenue function obtained by multiplying the price with the demand function. Then substitute $1.50 for p in the marginal revenue function.

Step-by-step explanation:

The student is asking to calculate the marginal revenue when the price is equal to $1.50, given the demand function q = 50000 - 25000p. To find the marginal revenue, we first need to calculate the total revenue function by multiplying price (p) with quantity (q). Total Revenue (TR) equals p×q. Plugging the demand function into the total revenue function gives us TR = p×(50000 - 25000p). We then differentiate the total revenue function with respect to the price to find the marginal revenue curve. The derivative of the total revenue function TR with respect to price p will give us the marginal revenue (MR) function. We can then substitute $1.50 for p in the marginal revenue function to find the marginal revenue at that price point.