A manufacturer's marginal revenue function is = 200 - 6q,where r is in dollars.What is the change in revenue if the number of units sold increases from q = 10 to q= 20?
A) $900
B) $1000
C) $1100
D) $1200
E) $1300

Question

A manufacturer's marginal revenue function is  = 200 - 6q,where r is in dollars.What is the change in revenue if the number of units sold increases from q = 10 to q= 20?
A) $900 
B) $1000 
C) $1100 
D) $1200 
E) $1300

Quizplus · Accepted Answer

To find the change in revenue, we need to calculate the difference between the marginal revenue when q = 20 and when q = 10, and then multiply that difference by the change in quantity (20 - 10 = 10).

Marginal revenue when q = 10: 
TR/q = 200 - 6q 
TR/10 = 200 - 6(10) 
TR/10 = 200 - 60 
TR/10 = 140

Marginal revenue when q = 20: 
TR/q = 200 - 6q 
TR/20 = 200 - 6(20) 
TR/20 = 200 - 120 
TR/20 = 80

Difference in marginal revenue: 
TR/20 - TR/10 = 80 - 140 = -60

Since the difference is negative, the revenue decreases when the quantity increases from 10 to 20. To find the magnitude of the decrease, we need to multiply the difference by the change in quantity:

-60 x 10 = -600

Therefore, the change in revenue is $1100 - $500 = -$600, which indicates a decrease in revenue. However, since the question asks for the magnitude of the change, we take the absolute value of the result:

|-$600| = $600

So the answer is (C) $1100

A Manufacturer's Marginal Revenue Function Is = 200 -