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You are watching: Calculating marginal revenue from a linear demand curve

A linear demand curve has complying with equation: P = a - bQ. From the demand also curve, If Q = 0, P = 150. So, 150 = a - 0 x b a = 150 (vertical intercept) If Q = 50, P = 0. Hence, 0 = a - 50b 0 = 150 - 50b 50b = 150 b = 3 S…View the complete answer
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Transcribed photo text: 2.Calculating marginal revenue from a direct demand curve The blue curve on the adhering to graph represents the demand curve facing a firm that deserve to collection its own prices. Use the graph input tool to help you answer the adhering to questions. You will not be graded on any type of alters you make to this graph. Note: Once you enter a value in a white area, the graph and also any kind of corresponding amounts in each grey field will certainly change as necessary. Graph Input Device Market for Goods 150 135 120 105 90 Quantity Demanded 25 Demand Price Dollars per unit) 75.00 75 60 45 30 15 nd 0 5 0 15 20 25 30 35 40 45 50 On the graph input tool, adjust the number discovered in the Quantity Demanded area to determine the prices that correspond to the production of 0, 10, 20, 25, 30, 40, and 50 units of output. Calculate the full revenue for each of these manufacturing levels. Then, on the following graph, usage the green points (triangle symbol) to plot the outcomes. 0 Total Revenue 1316 ), 112 Z 940 0 5 10 15 2025 30 35 40 45 50 QUANTITY (Number of units) Calculate the complete revenue if the firm produces 10 versus 9 systems. Then, calculate the marginal revenue of the 10th unit developed The marginal revenue of the 10th unit created is s Calculate the total revenue if the firm produces 20 versus 19 systems. Then, calculate the marginal revenue of the 20th unit produced. The marginal revenue of the 20th unit developed is S Based on your answers from the previous question, and also assuming that the marginalevenue curve is a directly line, use the babsence line (plus symbol) to plot the firm's marginal revenue curve on the complying with graph. (Round all values to the nearest increment of 30.) 150 120 Marginal Revenue 90 60 30 -30 0 5 10 15 20 25 30 35 4045 50 RTIY) Comparing your complete revenue graph to your marginal revenue graph, you have the right to watch that complete revenue is marginal revenue is equal to zero. at the output at which