If the demand for the Weekly World News at a local grocery store is described by Q  2,500  400P  I/10for I  $15,000 and P  $1.50, the marginal revenue of an additional paper sold at this store is

A) $.15.
B) $.38.
C) $.50.
D) $1.50.
E) $1.

Question

Maryam Hussain · Accepted Answer

Final Answer : C, Explanation :  The demand function given is:Q = 2500 - 400P + (I/10)where Q is the quantity demanded of Weekly World News, P is the price per paper, and I is the income level of the consumers.To find the marginal revenue of an additional paper sold at the store, we need to find the derivative of the demand function with respect to quantity, and then multiply it by the price.Q = 2500 - 400P + (I/10)dQ/dP = -400MR = dQ/dP * P = -400 * PAt P = $1.50, MR = -400 * $1.50 = -$600The negative sign indicates that the marginal revenue is decreasing as we sell more papers.Therefore, the best choice is to sell fewer papers at a higher price, in order to maximize profit.

If the demand for the Weekly World News at a local grocery store is described by Q  2,500  400P  I/10for I  $15,000 and P  $1.50, the marginal revenue of an additional paper sold at this store is

A) $.15.
B) $.38.
C) $.50.
D) $1.50.
E) $1.

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Learning Objectives

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If the demand for the Weekly World News at a local grocery store is described by Q  2,500  400P  I/10for I  $15,000 and P  $1.50, the marginal revenue of an additional paper sold at this store isA) $.15.B) $.38.C) $.50.D) $1.50.E) $1.

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Learning Objectives

Learning Objectives

Related questions

If the demand for the Weekly World News at a local grocery store is described by Q  2,500  400P  I/10for I  $15,000 and P  $1.50, the marginal revenue of an additional paper sold at this store is

A) $.15.
B) $.38.
C) $.50.
D) $1.50.
E) $1.