Question

Now assume that the typical firm operates as a monopolist that faces the demand function P=72-0.5Q.

What is the monopolist's marginal revenue function?
MR=72-0.25Q
MR=72-Q
MR=72-2Q
MR=72-4Q

Answer 1

Answer: the monopolist's marginal revenue function is MR = 72 - Q.

Step-by-step explanation:

To determine the monopolist's marginal revenue function, we need to understand the relationship between marginal revenue (MR) and the demand function.

The general relationship between marginal revenue and the demand function is as follows:

MR = dTR/dQ

where MR represents marginal revenue, TR represents total revenue, and Q represents quantity.

In this case, the demand function is given as P = 72 - 0.5Q, where P represents price and Q represents quantity.

To find the total revenue function, we multiply the price (P) by the quantity (Q):

TR = P * Q = (72 - 0.5Q) * Q = 72Q - 0.5Q^2

Now, to find the marginal revenue, we differentiate the total revenue function with respect to quantity (Q):

MR = dTR/dQ = 72 - Q