If the monopolist's demand curve is P = 50 - 10Q,then marginal revenue is zero when Q is equal to
A) 50 units.
B) 10 units.
C) 5 units.
D) 2.5 units.
E) 0 units.

Question

Quizplus · Accepted Answer

Marginal revenue is the change in total revenue when one unit of output is produced. Mathematically, it is calculated as the derivative of total revenue with respect to the quantity. 
So, Total Revenue = P * Q 
Differentiating with respect to Q, we get 
Marginal Revenue = d(TR)/dQ = P + Q*(dP/dQ)

Putting the values of P = 50 - 10Q in the MR equation we get
MR = 50 - 20Q

To find the quantity at which MR is zero, we equate MR to zero and solve for Q 
50 - 20Q = 0 
Q = 2.5

Therefore, the best answer is D, i.e., when Q is equal to 2.5 units.

If the Monopolist's Demand Curve Is P = 50 -