Total revenue is in dollars and x is the number of units. Suppose that in a monopoly market, the demand function for a product is given by p = 470 – 0.2x where x is the number of units and p is the price in dollars. (a) Find the total revenue from the sale of 500 units. 24 (b) Find the marginal revenue MR at 500 units. MR = $ %3D Interpret this value. O The 501st unit will lose |MR| dollars more in revenue. The 501st unit will bring in |MR| hundred dollars more in revenue. O The 501st unit will bring in |MR| dollars more in revenue. O The 501st unit will lose |MR| hundred dollars more in revenue. (c) Is more revenue expected from the 501st unit sold or from the 701st? Explain. The 701st unit will bring in $ more in revenue. Thus the v ---Select--- unit will bring in mo 501st Need Help? Read It Watch It 701st Submit Answer
Total revenue is in dollars and x is the number of units. Suppose that in a monopoly market, the demand function for a product is given by p = 470 – 0.2x where x is the number of units and p is the price in dollars. (a) Find the total revenue from the sale of 500 units. 24 (b) Find the marginal revenue MR at 500 units. MR = $ %3D Interpret this value. O The 501st unit will lose |MR| dollars more in revenue. The 501st unit will bring in |MR| hundred dollars more in revenue. O The 501st unit will bring in |MR| dollars more in revenue. O The 501st unit will lose |MR| hundred dollars more in revenue. (c) Is more revenue expected from the 501st unit sold or from the 701st? Explain. The 701st unit will bring in $ more in revenue. Thus the v ---Select--- unit will bring in mo 501st Need Help? Read It Watch It 701st Submit Answer
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Total revenue is in dollars and x is the number of units.
Suppose that in a monopoly market, the demand function for a product is given by
p = 470 – 0.2x
where x is the number of units and p is the price in dollars.
(a) Find the total revenue from the sale of 500 units.
24
(b) Find the marginal revenue MR at 500 units.
MR = $
%3D
Interpret this value.
O The 501st unit will lose |MR| dollars more in revenue.
The 501st unit will bring in |MR| hundred dollars more in revenue.
O The 501st unit will bring in |MR| dollars more in revenue.
O The 501st unit will lose |MR| hundred dollars more in revenue.
(c) Is more revenue expected from the 501st unit sold or from the 701st? Explain.
The 701st unit will bring in $
more in revenue. Thus the v ---Select--- unit will bring in mo
501st
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701st
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Expert Solution
Step 1
According to the question,
The demand function is given as
P = 470 – 0.2x
Total revenue can be calculated by the using the below formula
TR = P * Q
= (470 – 0.2x) x
= 470x – 0.2x^2
MR = TR’ = 470 – 0.4x
a) Total revenue from the sale of the 500 units
TR = 470*500 – 0.2 * (500)^2
= 235000 – 50000
= $185000
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