Explore BrainMass
Share

Explore BrainMass

    Marginal Revenue and Profit Maximization

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The Smith Company's demand curve for the company's product is P= 2,000 - 20Q, where P = price and Q = the number sold per month.

    a. Derive the marginal revenue curve for the firm.

    b. At what output is the demand for the firm's product price elastic?

    c. If the firm wants to maximize its dollar sales volume, what price should it charge?

    © BrainMass Inc. brainmass.com October 10, 2019, 8:33 am ad1c9bdddf
    https://brainmass.com/statistics/mixed-effects-models/marginal-revenue-profit-maximization-641607

    Solution Preview

    Price = 2,000 - 20Q

    a) Marginal Curve = it is the change in total revenue as the unit quantity sold changes. The calculation for marginal revenue is the first derivative of = d(TR) / ...

    Solution Summary

    Equations on calculating Marginal Revenue and profit maximization point.

    $2.19