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Given AR=5, Elasticity of demand =2 find MR
- a)2.5
- b)-2.5
- c)1.5
- d)2.0
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correc...
MR (Marginal Revenue) is the change in total revenue that results from selling one additional unit of a product. It is calculated by dividing the change in total revenue by the change in quantity sold. In this case, we are given that the elasticity of demand is 2 and the price (AR) is 5.
To determine the MR, we need to understand the relationship between price elasticity and marginal revenue. The formula for calculating MR is:
MR = AR * (1 - 1/|E|)
where AR is the average revenue and E is the price elasticity of demand.
In this case, AR is given as 5 and E is given as 2. Plugging these values into the formula, we get:
MR = 5 * (1 - 1/|2|)
= 5 * (1 - 1/2)
= 5 * (1 - 0.5)
= 5 * 0.5
= 2.5
Therefore, the correct answer is option 'A', 2.5.
Explanation:
- MR (Marginal Revenue) is the change in total revenue that results from selling one additional unit of a product.
- MR is calculated by dividing the change in total revenue by the change in quantity sold.
- The formula for calculating MR is: MR = AR * (1 - 1/|E|)
- In this case, AR is given as 5 and E (price elasticity of demand) is given as 2.
- Plugging these values into the formula, we calculate MR as 2.5.
- Therefore, the correct answer is option 'A', 2.5.
To determine the MR, we need to understand the relationship between price elasticity and marginal revenue. The formula for calculating MR is:
MR = AR * (1 - 1/|E|)
where AR is the average revenue and E is the price elasticity of demand.
In this case, AR is given as 5 and E is given as 2. Plugging these values into the formula, we get:
MR = 5 * (1 - 1/|2|)
= 5 * (1 - 1/2)
= 5 * (1 - 0.5)
= 5 * 0.5
= 2.5
Therefore, the correct answer is option 'A', 2.5.
Explanation:
- MR (Marginal Revenue) is the change in total revenue that results from selling one additional unit of a product.
- MR is calculated by dividing the change in total revenue by the change in quantity sold.
- The formula for calculating MR is: MR = AR * (1 - 1/|E|)
- In this case, AR is given as 5 and E (price elasticity of demand) is given as 2.
- Plugging these values into the formula, we calculate MR as 2.5.
- Therefore, the correct answer is option 'A', 2.5.
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Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correc...
MR=AR(1-1/e)
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Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correct answer is option 'A'. Can you explain this answer?
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Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correct answer is option 'A'. Can you explain this answer?.
Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Given AR=5, Elasticity of demand =2 find MRa)2.5b)-2.5c)1.5d)2.0Correct answer is option 'A'. Can you explain this answer?.
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