Suppose a firm faces the demand curve Q = 400

Question

Suppose a firm faces the demand curve Q = 400 - P. 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 = 400 - P, we can rearrange it to find P = 400 - Q. Substituting P in the TR equation gives TR = (400 - Q) * Q = 400Q - Q^2. Differentiating TR with respect to Q to find MR gives MR = 400 - 2Q.