Just needing to know if I have done the work correctly with this problem:
For the total revenue and marginal revenue the answers are:
Price $20 Quantity 0 TR 0 MR 0
Price $18 Quantity 1 TR 18 MR 18
Price $16 Quantity 2 TR 32 MR 14
Price $14 Quantity 3 TR 42 MR 10
Price $12 Quantity 4 TR 48 MR 6
Price $10 Quantity 5 TR 50 MR 2
Price $8 Quantity 6 TR 48 MR -2
Price $6 Quantity 7 TR 42 MR -6
Price $4 Quantity 8 TR 32 MR -10
Price $2 Quantity 9 TR 18 MR -14
I am also needing to graph the demand, MR and the MC curves on a graph. I know that the MR=Marginal Revenue and MC=Marginal cost. The only thing that I need to know is what numbers do I use to graph the demand.
Any assistance would be much appreciated.
Demand would simply be the relationship between price and quanty. E,.g, at P=18, Q=1. At P=2, Q=9.
To verify if you've correctly calculated the total revenue (TR) and marginal revenue (MR) values, we can use the formula for calculating total revenue and marginal revenue from the given price and quantity values.
Total Revenue (TR) is calculated by multiplying the price (P) by the quantity (Q): TR = P * Q.
Marginal Revenue (MR) is the change in total revenue resulting from a one-unit change in quantity (ΔQ). In this case, since the quantity is changing by 1 unit each time, MR can be calculated by subtracting the previous total revenue from the current total revenue: MR = TR(current) - TR(previous).
Let's go through a few of the calculations to verify:
For Price $18 and Quantity 1:
TR = 18 * 1 = 18
For MR, since this is the first data point, the previous TR is considered zero. Therefore, MR = 18 - 0 = 18.
For Price $16 and Quantity 2:
TR = 16 * 2 = 32
For MR, the previous TR is 18 (from the previous point). Therefore, MR = 32 - 18 = 14.
By following the same method, you can calculate the TR and MR values for the other data points. Ensure that the calculations are accurate.
Regarding graphing the demand, MR, and MC curves, you can use the data points you've calculated to plot them on a graph. To plot the demand curve, use the price and quantity data points provided. The demand curve represents the relationship between price and quantity, with price on the y-axis and quantity on the x-axis.
To plot the MR curve, use the MR values you've calculated. The MR curve represents the relationship between the change in total revenue and the change in quantity.
To plot the MC curve (Marginal Cost), you'll need additional information related to costs. The MC curve represents the relationship between the change in total cost and the change in quantity. If you have information on the total cost at different quantities, you can calculate the MC using the same formula as MR: ΔTC/ΔQ.
Once you have all the necessary data, you can plot the demand, MR, and MC curves on a graph and analyze their relationships.