Suppose a firm faces the demand curve Q = 2,000

Question

Suppose a firm faces the demand curve Q = 2,000 - 5P. The marginal revenue for the firm is MR(Q) = ____.

Quizplus · Accepted Answer

The marginal revenue (MR) is derived from the total revenue (TR), which is P*Q. Given the demand curve Q = 2,000 - 5P, we first solve for P = 400 - 0.2Q. The total revenue (TR) is P*Q = (400 - 0.2Q)Q. The marginal revenue (MR) is the derivative of TR with respect to Q, which gives MR = 400 - 0.4Q.