ECNC 213 – Derivation and Plots of Demand, Marginal Revenue, and Revenue Curves

ECNC 213 Derivation and Plots of Demand, Marginal Revenue, and Revenue Curves

The equation below represents a linear demand curve.  Use the grid (right) for your plots.  Write all derivations in the space below.

l) Plot the demand function on the top set of axes.  Your demand function is:

Qx = 60000 – 200Px

2) The price function is the inverse of the demand function. Write this inverse below.

3) Use the price function to obtain the total revenue function (TR).  Write the TR function below.  You will plot TR on the lower set of axes in step 5.

4) Derive (or simply write) the marginal revenue (MR) function below.  Plot MR on the top set of axes (in the proper location with respect to the demand function).

5) Use the TR function (3) to calculate revenue for each of the seven Qx values below. Use the seven revenues to plot the revenue function properly.

Qx    Revenue
0
10k
20k
30k
40k
50k
60k
k  means thousand

Here’s the SOLUTION

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