Question

Suppose the market demand for a good is described by the demand function P = 160 - 0.5Q. It follows that the total revenue function relating the total revenues (TR) to the quantity sold (Q) is:

Answer 1

The total revenue function derived from the demand function P = 160 - 0.5Q is TR = 160Q - 0.5Q^2, showing the revenue based on quantity sold.

Step-by-step explanation:

The student's question relates to developing the total revenues (TR) function from the given demand function P = 160 - 0.5Q. Total revenue is calculated by multiplying the price (P) by the quantity sold (Q). Using the given demand function, TR equals P times Q, which can be represented as TR = Q(160 - 0.5Q). Therefore, the total revenue function is TR = 160Q - 0.5Q2. This equation reflects the relationship between the market demand for a good and the total revenue generated by selling that good at varying quantities.