2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per unit) 100 90 80 70 50 30 20 Demand 10 0 + 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Units) Graph Input Tool Market for Goods Quantity Demanded (Units) 25 Demand Price (Dollars per unit) 50.00 (?) On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 10, 20, 25, 30, 40, and 50 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. TOTAL REVENUE (Dollars) 1250 1125 1000 875 750 625 500 375 250 125 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Number of units) Total Revenue ? Calculate the total revenue if the firm produces 10 versus 9 units. Then, calculate the marginal revenue of the 10th unit produced. The marginal revenue of the 10th unit produced is
2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per unit) 100 90 80 70 50 30 20 Demand 10 0 + 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Units) Graph Input Tool Market for Goods Quantity Demanded (Units) 25 Demand Price (Dollars per unit) 50.00 (?) On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 10, 20, 25, 30, 40, and 50 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. TOTAL REVENUE (Dollars) 1250 1125 1000 875 750 625 500 375 250 125 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Number of units) Total Revenue ? Calculate the total revenue if the firm produces 10 versus 9 units. Then, calculate the marginal revenue of the 10th unit produced. The marginal revenue of the 10th unit produced is
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:2. Calculating marginal revenue from a linear demand curve
The blue curve on the following graph represents the demand curve facing a firm that can set its own prices.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
PRICE (Dollars per unit)
100
90
80
70
50
30
20
Demand
10
0
+
0
5
10
15 20 25 30 35 40 45 50
QUANTITY (Units)
Graph Input Tool
Market for Goods
Quantity
Demanded
(Units)
25
Demand Price
(Dollars per unit)
50.00
(?)
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 10,
20, 25, 30, 40, and 50 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green
points (triangle symbol) to plot the results.
TOTAL REVENUE (Dollars)
1250
1125
1000
875
750
625
500
375
250
125
0
0
5
10
15
20 25
30
35
40
45
50
QUANTITY (Number of units)
Total Revenue
?
Calculate the total revenue if the firm produces 10 versus 9 units. Then, calculate the marginal revenue of the 10th unit produced.
The marginal revenue of the 10th unit produced is
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