If the demand function is p=100-5q, what value of Q maximizes the total revnue
Dear student
total Revenue = price X quantity
R(q) = (100 -5q) X q
R(q) = 100q - 5q2
as we know total reveue is maximum, when marginal revenue is equal to zero.
we can find the marginal revenue by total reveue .
simple, differentiate the total revenue in terms of q
R'(q) = 100 - 10 q, so its a marginal function.
0 = 100 - 10 q
q = 10
so, 10 is the unit when total revenue is maximum.because at this point marginal revenue is zero.
Regards
total Revenue = price X quantity
R(q) = (100 -5q) X q
R(q) = 100q - 5q2
as we know total reveue is maximum, when marginal revenue is equal to zero.
we can find the marginal revenue by total reveue .
simple, differentiate the total revenue in terms of q
R'(q) = 100 - 10 q, so its a marginal function.
0 = 100 - 10 q
q = 10
so, 10 is the unit when total revenue is maximum.because at this point marginal revenue is zero.
Regards