Suppose the demand curve for a firm is Q = 50 - 0.125P, where Q measures units of output and P is the price per unit. The value of marginal revenue at 10 units of output is $____.

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue resulting from a one-unit increase in output. The total revenue function is TR = P * Q. Substituting the demand curve into the total revenue function, we get TR = (50 - 0.125P) * Q. Taking the derivative of TR with respect to Q, we get MR = 50 - 0.25P. Substituting Q = 10 into the marginal revenue function, we get MR = 50 - 0.25P = 50 - 0.25(10) = 40.

Suppose the Demand Curve for a Firm Is Q =