Math Problem Statement
(a) If the marginal revenue of a certain company is given by the following function. R’ = 15 -9x -3x2, where x is quantity, find (i) the revenue function and (ii) demand function.
Solution
To solve the problem, let's break it down into two parts:
(i) Finding the Revenue Function
The marginal revenue function is given by:
The revenue function is the integral of the marginal revenue function. We can find it by integrating with respect to :
Let's integrate each term:
So, the revenue function is:
Where is the constant of integration, which can be determined if initial conditions are provided (e.g., if the revenue is known for a certain quantity ).
(ii) Finding the Demand Function
The demand function relates the price to the quantity . In economics, revenue is often given by:
To find the demand function, express as:
Substituting the revenue function we found earlier:
Simplifying:
So, the demand function is:
Summary
- Revenue Function:
- Demand Function:
If you want to find the specific value of , you'll need additional information about revenue at a particular quantity.
Would you like more details or have any further questions?
Here are some questions to explore this topic further:
- How does the value of affect the revenue and demand functions?
- What is the significance of the marginal revenue function in determining optimal production levels?
- How can the demand function help in pricing strategy?
- What happens to the revenue function when increases significantly?
- How does the shape of the demand curve change with different values of ?
Tip: Always check initial conditions or specific data points to determine constants when integrating functions in economics.
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Math Problem Analysis
Mathematical Concepts
Calculus
Integral calculus
Economics
Formulas
Integral of polynomial functions
Demand function from revenue function
Theorems
-
Suitable Grade Level
Undergraduate
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