CA Foundation P4 · Chapter 4 · Question 2 of 15
A monopolist faces the demand curve P = 50 - 2Q. At Q = 10, total revenue and marginal revenue respectively are:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 300 and Rs. 10
Explanation
At Q = 10, P = 50 - 20 = 30, so TR = 30 x 10 = Rs. 300. TR = 50Q - 2Q^2, hence MR = 50 - 4Q = 50 - 40 = Rs. 10. Rs. 30 is the price (AR), not MR. For a linear demand curve MR has twice the slope of AR.
More Price Determination in Different Markets MCQs
- Q4Market demand is Qd = 200 - 5P and market supply is Qs = 50 + 10P. The equilibrium price and quantity are:
- Q5In the short run, a perfectly competitive firm will shut down if the market price falls below:
- Q6In long-run equilibrium under perfect competition, each firm:
- Q7Which statement about a profit-maximising monopolist is correct?
- Q8Under third-degree price discrimination, a profit-maximising monopolist will charge: