Question

Where does the marginal revenue line touch the P-axis (what is the point of intersection of the marginal revenue line with the P-axis) for the private sellers with the demand function P = -1.3Q + 51?

Answer 1

The marginal revenue line intersects the P-axis at P = 51 for the given demand function P = -1.3Q + 51 when Q is zero.

Step-by-step explanation:

The point of intersection of the marginal revenue line with the P-axis for the private sellers with the demand function P = -1.3Q + 51 can be found where the quantity Q is zero, as at this point the revenue from selling an additional unit would also be zero, given there are no units sold. Thus, substituting Q with 0 in the demand function, we get P = -1.3(0) + 51, which simplifies to P = 51. Therefore, the marginal revenue line touches the P-axis at P = 51.

The marginal revenue line can be found by taking the derivative of the demand function with respect to quantity. In this case, the demand function is P = -1.3Q + 51. Taking the derivative of this function gives us the marginal revenue function, which is equal to -1.3. The point of intersection of the marginal revenue line with the P-axis can be found by setting Q = 0 in the demand function. When Q = 0, P = 51. Therefore, the point of intersection of the marginal revenue line with the P-axis is (0, 51).