Question

In: Economics

a) Demand in a competitive market is given by, P=110-.0001Qd. Supply is given by P=10+.0001Qs. What is Marginal Revenue in this market?

b) Demand in a competitive market is given by, P=110-.0001Qd. Supply is given by P=10+.0001Qs. What is the market quantity?

Expert Solution

a) TR = P*Q

= 110Q - .0001*Q^2

MR = dTR/dQ

= 110 - .0002Q

As at eqm, Q = 500,000

So, MR = 110-.0002*500,000

= 110- 100

= 10

.

B) at market eqm :

Demand = supply

110-.0001Q = 10+.0001Q

100= .0002Q

Q*= 100/.0002

= 500,000

Rahul Sunny answered 2 years ago

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