Question

A company estimates that the total revenue, r, in dollars, received from the sale of q items is r= ln ( 1 1000 q^2 ) . calculate and interpret the marginal revenue if q = 10 .

Answer 1

To calculate the marginal revenue, we need to find the derivative of the total revenue function. In this case, the total revenue function is given by r = ln(1/1000q^2). Taking the derivative of this function with respect to q will give us the marginal revenue function.

Step-by-step explanation:

To calculate the marginal revenue, we need to find the derivative of the total revenue function. In this case, the total revenue function is given by r = ln(1/1000q^2). Taking the derivative of this function with respect to q will give us the marginal revenue function.

d(r)/dq = (2/1000q)

When q = 10, the marginal revenue can be calculated as follows:

d(r)/dq = (2/1000 * 10) = 0.002

Therefore, when q = 10, the marginal revenue is 0.002 dollars per item. This means that for each additional item sold at a quantity of 10, the company can expect to earn an additional $0.002 in revenue.