We appreciate your visit to Suppose that a firm faces the demand equation tex Q 100 0 5P tex where tex P tex is the price and tex Q tex. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
The output level that will maximize the firm's total revenue is 50.
From the given answer choices, the correct option is (d) 50.
To find the output level that will maximize the firm's total revenue, we need to determine the quantity at which the firm's marginal revenue equals zero.
First, let's find the firm's total revenue function. Total revenue (TR) is calculated by multiplying the price (P) by the quantity (Q) sold.
Given the demand function Q = 100 - 0.5P, we can rewrite it as P = 200 - 2Q.
Now, substitute this expression for P into the TR equation: TR = P * Q = (200 - 2Q) * Q = 200Q - 2Q^2.
To find the output level that maximizes total revenue, we differentiate the total revenue function with respect to Q and set it equal to zero.
d(TR)/dQ = 200 - 4Q = 0.
Solving this equation, we get Q = 50.
Therefore, the output level that will maximize the firm's total revenue is 50.
Hence, the correct answer is (d) 50.
Learn more about total revenue on .
https://brainly.com/question/25623677
#SPJ11
Thanks for taking the time to read Suppose that a firm faces the demand equation tex Q 100 0 5P tex where tex P tex is the price and tex Q tex. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!
- Why do Businesses Exist Why does Starbucks Exist What Service does Starbucks Provide Really what is their product.
- The pattern of numbers below is an arithmetic sequence tex 14 24 34 44 54 ldots tex Which statement describes the recursive function used to..
- Morgan felt the need to streamline Edison Electric What changes did Morgan make.
Rewritten by : Barada
