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    MR and TR Computation using a demand curve equation

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    Can you assist me with the following problem. Thank you.

    If we have a demand curve which can be described by Pd= 72.33-1.76Q, and we have a starting price of $50, what happens to TR when the price falls to $40? Find whether MR is positive or negative and fully explain why. Now, for the same demand curve, what happens to MR when the price falls from $20 to $10? Is this consistent with what happened in the first instance, or not? Show this in Excel by graphing a TR curve.

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    ** Please see the attached file for the complete solution response **

    Guide computation:

    Demand curve which can be described by Pd= 72.33-1.76Q

    0 = 72.33-1.76Q

    1.76Q = 72.33
    Q = 72.33 / 1.76
    Q = 41.09659

    at a starting price of $50,
    TR = Price x quantity
    TR= 50 x ...

    Solution Summary

    The solution computes for the Marginal and Total Revenue using a demand curve equation. It provides both a guide to the calculations and a sample computation in Excel.