The blue curve on the following graph represents the demand curve facing a firm that can set its own prices.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.

On the previous graph, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 10, 20, 25, 30, 40, or 50 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results.

Calculate the total revenue if the firm produces 10 versus 9 units. Then, calculate the marginal revenue of the 10th unit produced.
The marginal revenue of the 10th unit produced is $_______.
Calculate the total revenue if the firm produces 20 versus 19 units. Then, calculate the marginal revenue of the 20th unit produced.
The marginal revenue of the 20th unit produced is $_______
Based on your answers from the previous question, and assuming that the marginal revenue curve is a straight line, use the black line (plus symbol) to plot the firm's marginal revenue curve on the following graph. (Round all values to the nearest increment of 10.)

Comparing your total revenue graph to your marginal revenue graph, you can see that when total revenue is increasing, marginal revenue is _______________. (negative / positive/equal to zero)?

Transcribed Image Text:

Graph Input Tool Market for Goods 50 I guantity Bemanded (Units) 45 25 40 Demand Price (Dollars per unit) 25.00 35 30 25 20 15 Demand 10 10 15 20 25 30 35 40 45 50 QUANTITY (Units) PRICE (Dollars per unit) 630 567 Total Revenue 504 441 378 315 252 189 126 63 10 15 20 25 30 35 40 45 50 QUANTITY (Number of units) TOTAL REVENUE (Dollars)