Question

Suppose a manufacturer sells a product as $2 per unit. If q units are sold, (a) write the total revenue function, (b) and find the marginal revenue function. What does the constant marginal revenue function mean?

Answer 1

We are given that a manufacturer sells a product as $2 per unit.

Quantity = q units

So, Total revenue =
`\text{Cost per unit} * quantity`

Total revenue =
`2q`

So, the total revenue function is
`2q`

Marginal revenue is the derivative of the revenue functions

So, Marginal revenue =
`(dR)/(dq) =2`

The marginal revenue function is 2

The constant marginal revenue function mean that the revenue earned by the addition of the output is constant.