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Assume that when price is 20, the quantity demanded is 15 units and when price 2 is 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.?
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Assume that when price is 20, the quantity demanded is 15 units and wh...
Calculating Marginal Revenue
To calculate marginal revenue, we need to know the change in total revenue resulting from a one-unit change in quantity. In other words, it is the additional revenue generated by selling one more unit of the product.
Using the Given Information
In this case, we are given that the quantity demanded increases from 15 units to 16 units when the price decreases from 20 to 18. This means that the price elasticity of demand is less than 1, indicating that the demand is relatively inelastic.
Calculating Marginal Revenue
To calculate marginal revenue with this information, we can use the following formula:
Marginal Revenue = (Change in Total Revenue) / (Change in Quantity)
We know that the change in quantity is 1 unit (from 15 to 16), and we can calculate the change in total revenue using the following formula:
Change in Total Revenue = (New Quantity x New Price) - (Old Quantity x Old Price)
Plugging in the values we have, we get:
Change in Total Revenue = (16 x 18) - (15 x 20) = 288 - 300 = -12
This means that the total revenue decreased by $12 when the quantity increased from 15 to 16 units. Therefore, the marginal revenue is:
Marginal Revenue = (-12) / 1 = -$12
Interpreting the Result
A negative marginal revenue indicates that the total revenue decreases as the quantity increases. This is because the demand is relatively inelastic, meaning that the decrease in price did not lead to a significant increase in quantity demanded. As a result, the decrease in price resulted in a decrease in total revenue.
To calculate marginal revenue, we need to know the change in total revenue resulting from a one-unit change in quantity. In other words, it is the additional revenue generated by selling one more unit of the product.
Using the Given Information
In this case, we are given that the quantity demanded increases from 15 units to 16 units when the price decreases from 20 to 18. This means that the price elasticity of demand is less than 1, indicating that the demand is relatively inelastic.
Calculating Marginal Revenue
To calculate marginal revenue with this information, we can use the following formula:
Marginal Revenue = (Change in Total Revenue) / (Change in Quantity)
We know that the change in quantity is 1 unit (from 15 to 16), and we can calculate the change in total revenue using the following formula:
Change in Total Revenue = (New Quantity x New Price) - (Old Quantity x Old Price)
Plugging in the values we have, we get:
Change in Total Revenue = (16 x 18) - (15 x 20) = 288 - 300 = -12
This means that the total revenue decreased by $12 when the quantity increased from 15 to 16 units. Therefore, the marginal revenue is:
Marginal Revenue = (-12) / 1 = -$12
Interpreting the Result
A negative marginal revenue indicates that the total revenue decreases as the quantity increases. This is because the demand is relatively inelastic, meaning that the decrease in price did not lead to a significant increase in quantity demanded. As a result, the decrease in price resulted in a decrease in total revenue.
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Assume that when price is 20, the quantity demanded is 15 units and when price 2 is 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.?
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Assume that when price is 20, the quantity demanded is 15 units and when price 2 is 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Assume that when price is 20, the quantity demanded is 15 units and when price 2 is 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assume that when price is 20, the quantity demanded is 15 units and when price 2 is 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.?.
Assume that when price is 20, the quantity demanded is 15 units and when price 2 is 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Assume that when price is 20, the quantity demanded is 15 units and when price 2 is 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assume that when price is 20, the quantity demanded is 15 units and when price 2 is 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.?.
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