Answer:
a.
Total revenue = 25Q - Q^2
Margin revenue = 25 - 2Q
b.
12.50
c.
12.50
Explanation:
a.
SUe the following equation for total revenue
Total revenue = PQ
Where
P = 25 - Q
Placing value sin the equation
Total revenue = (25-Q)Q = 25Q - Q^2
Margin revenue = Differentiation of total revenue = Demand curve - Quantity = ( 25 - Q) - Q = 25 - Q - Q = 25 - 2Q
b.
When marginal revenue will be zero, the equation will be
Marginal Revenue = 0
25 - 2Q = 0
2Q = 25 - 0
2Q = 25
Q = 25/2
Q = 12.5
c.
When marginal revenue will be zero the revenue will be maximized
Hence,
Price = P = 25 - Q = 25 - 12.5 = 12.5 (as per marginal revenue Q = 12.5)
