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Why MR curve is always half of demand curve explain graphically?
Wiki User
∙ 14y ago
Marginal Revenue is the derivate (rate of change) of total revenue. Total revenue is = Price x Quantity. For instance, if the demand curve was Q = 100 - P, find the inverse demand (P = 100 - Q). Total Revenue = 100Q-Q^2
Therefore marginal revenue is the derivative of 100Q - Q^2.
MR = 100 - 2Q (thus twice the negative slope).
In short: inverse demand x Q, find the derivative.
Wiki User
∙ 14y ago
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