Calculate Marginal Revenue for the 251st Unit

What is the marginal revenue for the 251st unit if the demand equation is Q = 756 – 19(P) and the variable costs are $6?

The marginal revenue for the 251st unit is -$75.

Calculating Marginal Revenue

Marginal revenue for the 251st unit can be calculated by finding the change in total revenue when the quantity sold increases from 250 to 251 units. Marginal revenue represents the additional revenue generated from selling one more unit. To calculate the marginal revenue, we first need to determine the price at each quantity. With the demand equation Q = 756 – 19(P) and given that variable costs are $6, we can calculate the prices as follows: 1. At 250 units: Q = 250, substitute into the demand equation: 250 = 756 – 19(P) P = 26 Price at 250 units = $26 2. At 251 units: Q = 251, substitute into the demand equation: 251 = 756 – 19(P) P = 25.6 Price at 251 units = $25.6 Next, we calculate the revenue at each quantity: 1. Revenue at 250 units = 250 units * $26 = $6,500 2. Revenue at 251 units = 251 units * $25.6 = $6,425 Finally, we find the marginal revenue by subtracting the revenue at 250 units from the revenue at 251 units: Marginal Revenue = Revenue at 251 units - Revenue at 250 units = $6,425 - $6,500 = -$75 Therefore, the marginal revenue for the 251st unit is -$75.
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