Consider a monopolist facing a linear (inverse) demand curve given by:
Consider a monopolist facing a linear (inverse) demand curve given by:
p = a – bQ
Show with calculus that the marginal revenue in fact has the same price-axis intercept but twice the slope as the inverse demand curve above.
ANSWER
Total Revenue = (a – bQ)Q. MR = dTR/dQ = a – 2bQ.
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