Question

For these activities you should investigate the concepts of total income, marginal income, total cost, marginal cost, average cost, consumer surplus and producer surplus.

Section 2. In the following problems, dr / dq is a marginal revenue function. With this information, find the demand function for the exercises that appear below:

a) dr / dq = 0.7

b) dr / dq = 10 - (1/16) q

Answer 1

a) MR = dr/dq = 0.7,

MR = 0.7dq

TR = 0.7q + C, C is the integrational constant.

(TR is the total revenue)

TR = P*q = 0.7q + C,

P = 0.7 + C/q, This is the required demand function.

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b) MR = dr/dq = 10 - (1/16)*q,

MR = [10 - (1/16)*q ]dq

TR = P * q = 10q - (1/32)*q² + C, C is the integrational constant.

P = 10 - (1/32)*q + C/q , This is the required demand function.