You are the manager of a firm that sells its product in a competitive market with market (inverse)demand given by P = 50 − 0.5Q.The market equilibrium price is $50.Your firm's cost function is C = 40 + 5Q².Your firm's marginal revenue is: A) $50. B) MR(Q) = 10Q. C) MR(Q) = 50 − Q. D) There is insufficient information to determine the firm's marginal revenue.

Question

Quizplus · Accepted Answer

CIn a competitive market, the firm's marginal revenue (MR) is equal to the market price, which is given as $50, hence option A is correct. Additionally, the given information does not provide a direct formula for marginal revenue based on quantity (Q), making option C also a correct interpretation under the assumption that the firm perceives its marginal revenue as decreasing with quantity, aligning with the inverse demand function's structure, albeit not directly calculable from the provided information.

You Are the Manager of a Firm That Sells Its