Suppose a monopolist faces the demand curve Y^d=1600- 400 P. Which of the following is correct? A)Profit = 1600P - 400P²- MC B)TR = 1600- 400P² C)MR = 1600- 200 P D)AR = 1600- 200P

Question

Quizplus · Accepted Answer

MR is derived from TR, and TR = P*Q. Given the demand curve Q = 1600 - 400P, TR = P(1600 - 400P). Differentiating TR with respect to P gives MR = 1600 - 800P, which is not an option here. However, the correct interpretation of the demand curve and its relationship to MR seems to have been misunderstood in the options provided. The correct MR should involve the derivative of TR with respect to Q, which typically results in a slope that is twice the magnitude of the demand curve's slope in absolute value, indicating a mistake in the formulation of the options. Given the options, none directly correspond to the correct mathematical derivation of MR from the given demand curve, suggesting a potential error in the question or options themselves.

Suppose a Monopolist Faces the Demand Curve Yd=1600- 400 P

Suppose a Monopolist Faces the Demand Curve Y^d=1600- 400 P