Assuming the inverse demand function for good Z can be written as P = 90 - 3Q,when Q is equal to 5,average revenue and marginal revenue are equal to ________ and ________.
A)$75; $75.
B)$85; $85.
C)$75; $60.
D)$⁶⁰; $⁶⁰.

Question

Quizplus · Accepted Answer

To find the average revenue, we need to divide the total revenue (TR) by the quantity sold (Q). Total revenue is equal to price (P) times quantity sold (Q), so:

TR = P × Q
TR = (90 - 3Q) × Q
TR = 90Q - 3Q^2

Now, to find the average revenue, we divide TR by Q:

AR = TR/Q
AR = (90Q - 3Q^2)/Q
AR = 90 - 3Q

When Q is equal to 5, AR = 75.

To find the marginal revenue, we take the derivative of TR with respect to Q:

MR = dTR/dQ
MR = 90 - 6Q

When Q is equal to 5, MR = 60.

Therefore, the answer is C, $75 for average revenue and $60 for marginal revenue.

Assuming the Inverse Demand Function for Good Z Can Be