Suppose the demand function for a manufacturer's product is given by p = 20 - 0.8q,where p represents the price per unit for q units.Find the marginal revenue when q = 10.
A) 4
B) 8
C) 10
D) 16
E) 20

Question

Quizplus · Accepted Answer

The marginal revenue (MR) is found by differentiating the revenue function with respect to q. The revenue function, R, is p*q = (20 - 0.8q)q. Differentiating R with respect to q gives MR = dR/dq = 20 - 1.6q. Substituting q = 10 into this equation gives MR = 20 - 1.6(10) = 20 - 16 = 4.

Suppose the Demand Function for a Manufacturer's Product Is Given