Given the demand function Q_X = 1500 - 100P_X + 75P_Y + 1.5I + .06A where P_Y = $40.00. I = $2500, and A = $5,000, marginal revenue will be zero where Q = 4275.

Question

Quizplus · Accepted Answer

The marginal revenue curve is the derivative of the total revenue curve. The total revenue curve is equal to the price times the quantity. The price is equal to 1500 - 100Q + 75P_Y + 1.5I + .06A. Substituting in the given values, we get:TR = (1500 - 100Q + 75(40) + 1.5(2500) + .06(5000))QTR = (1500 - 100Q + 3000 + 3750 + 300)QTR = (8250 - 100Q)QThe marginal revenue curve is the derivative of the total revenue curve:MR = dTR/dQ = 8250 - 200QSetting MR equal to zero, we get:8250 - 200Q = 0200Q = 8250Q = 41.25Therefore, marginal revenue will be zero where Q = 41.25.

Given the Demand Function QX = 1500 - 100PX

Given the Demand Function Q_X = 1500 - 100P_X