Marginal Revenue

Hey,

Can anyone here breakdown the answer the this question very simply?

A power generation company is a monopoly that has very high barriers to entry. The quantity demand (QD) for its product is QD = 800 – 0.25 × P (where P is price). The slope of the marginal revenue curve is_closest_ to:

Answer: -8

Thanks!

QD = 800 - 0.25 * P I 1.solve for P

P = -4 * QD + 3,200 I 2. Multiply with QD to get the revenue function

P * QD = -4*QD^2 + 3,200 QD I 3. Form the derivation to QD for the marginal revenue curve

dP/dQD = -8 * QD + 3,200 I 4. This is the marginal revenue curve with a corresponding slope of -8

Note that to understand Oscar’s answer, you have to know differential calculus.