Question

1. You’ve been hired by Nielsen Company to study the market for potatoes. Demand in the potato market is characterized by the demand function ???????????????? = 25 − 1 2 PP. Where P is the market price of a potato and ???????????????? is the quantity of potatoes demanded. The marginal revenue of the fifth potato produced is _______.

Answer 1

Answer:

P = MR = 1

Explanation:

The demand function is q = 25 - 12p.

The  total income is the price of potatoes multiplied by the quantities of potato --> P * Q

p*q = p*(25-12p)

p*q = 25p - 12p^2

the first derivative of the previous equation is the marginal revenue. In perfect competition the Price = Marginal revenue.

First derivative of total income ---> 25-24p

And MR = P

25-24p=p

25=25p

p=1