Question

Suppose the total revenue function is tr = 75q - 4q2 and the total cost function is tc = q2 + 5q + 36.
a. find the marginal revenue (mr) equation by dtr/dq.

Answer 1

Marginal Revenue is defined as the revenue generated with respect to increase in sale of another extra unit of product.

So we will calculate Marginal Revenue equation by finding the change in Revenue with respect to change in Quantity.

Given the Total Revenue Function as:-

$Tr = 75q-4q^{2}$

Differentiating Total Revenue function (Tr) with respect to quantity (q):-

$\frac{dTr}{dq} = 75-2(4q) = 75-8q$

So Marginal Revenue equation will be, $Mr = 75-8q$