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, what is the marginal revenue equation?

Question

Quizplus · Accepted Answer

The marginal revenue is the derivative of the demand function with respect to quantity. Taking the derivative of the demand function Q_X = 1500 - 100P_X + 75P_Y + 1.5I + .06A with respect to Q_X, we get: MR = 75 - 0.01Q_X Substituting the given value of P_Y = $40.00, I = $2500, and A = $5,000, we get: MR = 85.5 - 0.02Q_X Therefore, the correct answer is option C.

Given the Demand Function QX = 1500 - 100PX

Given the Demand Function Q_X = 1500 - 100P_X