The demand for a new drug is given by equation Q 150 3P wh

The demand for a new drug is given by equation Q = 150 - 3P (where Q is the bottles of medicine and P is the price per bottle in dollars). The slope of the demand curve is -1/3.

What is the equation for total revenue iin terms of Q?

1) TR = 50Q - 3Q2

2) TR = 150Q - 3PQ

3) TR = 50Q - Q2/3

4) TR = 50Q2 - Q/3

5) TR = 150 - 3Q2

What is the equation for marginal revenue?

1) MR = 50 - (1/3)Q

2) MR = 150 - (2/3)Q

3) MR = 150 - 6Q

4) MR = 150 - 6P

5) MR = 50 - (2/3)Q

Solution

Q = 150 - 3P

So, 3P = 150 - Q

P = (150/3) - (Q/3) = 50 - (Q/3)

(a)

Total revenue, TR = P x Q = Q x [50 - (Q/3)] = 50Q - (1/3)Q²

Correct option (3)

(b)

Marginal Revenue, MR = dTR / dQ = 50 - (2/3)Q

Correct option (5).