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# Marginal Revenue and Cost

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2. A firm produces output with a constant marginal cost MC = 2. Its output is consumed by two types of customers "a" and "b", with demand functions:
Pa = 10 (1/10) Q
Pb = 18 - (1/5) Q, respectively.
2.1. Calculate marginal revenue for each market.
2.2. For each market, graph demand, marginal cost and marginal revenue, and show equilibrium prices and quantities.
2.3. Numerically find prices and quantities for each market.

https://brainmass.com/economics/general-equilibrium/marginal-revenue-cost-157045

#### Solution Preview

2. A firm produces output with a constant marginal cost MC = 2. Its output is consumed by two types of customers "a" and "b", with demand functions:
Pa = 10 - (1/10) Q
Pb = 18 - (1/5) Q, respectively. ...

#### Solution Summary

Marginal Revenue and Costs are calculated.

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## marginal revenue costs

The economics student knows that the profit maximizing manager will produce the quantity where marginal revenue equals marginal cost (a J-shaped curve which reflects a different marginal cost at every quantity). The manager knows that organizations estimate marginal costs that are constant over a range of quantity levels. How can the manager approximate the marginal revenue equals marginal cost rule to maximize profit?

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