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Given (P-20-) and (TC -2Q+56) be the demand and total cost functions for some commodity respectively
Given (P-20-) and (TC -2Q+56) be the demand and total cost functions for some commodity respectively. Answer the following (CL05) Choose... Find the marginal cost function MC Find the marginal revenue function MR Estimate the effect on TC by 2 units increase from the current output level of 15 units. Find the total revenue function in terms of Q Choose... Choose MC-20 MC-2 4 30 MR-20-02( means power) 60 MR-20-20 TR - 20-Q 26means power TR - 2000 2( means power
Expert Solution
Given, P = 20 - Q
TC = 2Q + 56
Differentiate TC wrt Q, we get
MC = 2
Total revenue, TR = 20Q - Q^2
Differentiating TR wrt Q, we get
MR = 20 - 2Q
When Q = 15, TC = 2Q + 56 = 2 × 15 + 56 = $ 86
When Q = 17, TC = 2 × 17 + 56 = $ 90
Change in TC = 90 - 86 = 4
- Marginal cost, MC = 2
- Marginal revenue, MR = 20 - 2Q
- Effect of change in Q, TC = 4
- Total revenue, TR = 20Q - Q^2
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