Question

In: Economics

What is the marginal revenue (MR) and marginal cost (MC) as a function of Q? At what quantity is

The Company X has a monopoly on the beer market. Market demand is given by ?? = 200 - 4? and the company's short-term cost as a function of ? is given by ? (?) = ?2 + 40

What is the marginal revenue (MR) and marginal cost (MC) as a function of Q? At what quantity is ?? = ???

Solutions

Expert Solution

P= 200-4Q and C(Q) = Q​​​​​​2 + 40

Marginal Revenue is the revenue from an additional unit of output. It is given by dTR/dQ

TR = PQ = (200-4Q)Q = 200Q -4Q​​​​2

dTR/dQ = 200 - 8Q = MR

Marginal Cost is the cost of producing an extra unit of output.

MC = dC(Q)/dQ = 2Q

MC = MR ==> 2Q = 200 - 8Q

==> 10Q =200

==> Q= 20

Rahul Sunny answered 2 years ago
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