Suppose a firm faces the demand curve Q = 4P^-2. The marginal revenue for the firm is MR(Q) = ____.

Question

Quizplus · Accepted Answer

Marginal revenue (MR) is derived from the total revenue (TR), which is price (P) times quantity (Q). To find MR from the demand curve, differentiate the demand equation with respect to Q. The given demand curve is Q = 4P^-2. Differentiating this with respect to Q would not directly give MR because the demand curve is not in the form of P = f(Q). However, understanding the relationship between MR and the demand curve, MR typically has twice the slope of the demand curve when P = f(Q). Given the structure of the options and the demand curve, option A, Q^-0.5, is the closest in form to what the MR might look like, considering a mistake in interpreting the demand curve's equation structure for MR calculation.

Suppose a Firm Faces the Demand Curve Q = 4P-2

Suppose a Firm Faces the Demand Curve Q = 4P^-2