Suppose a firm's inverse demand function is P = 40

Question

Suppose a firm's inverse demand function is P = 40 - 8Q.What is the firm's revenue function? A)R = 40Q - 8Q² B)R = 40 - 16Q C)R = -8Q D)R = 40/Q - Q E)R = 5 - Q

Quizplus · Accepted Answer

The revenue function R is calculated by multiplying the price P by the quantity Q. Given the inverse demand function P = 40 - 8Q, the revenue function is R = P * Q = (40 - 8Q) * Q = 40Q - 8Q^2.