26. If an unregulated electric company is a monopolist and faces demand of Q = 50 - 10P, its marginal revenue function is given by a. 5 - 1/10Q b. 1 - 1/10Q c. 5 - 1/20Q d. 5 - 1/5Q ANSWER: d 21. Suppose a farmer is a price taker for soybean sales with cost functions given by TC = 0.1q^2 + 2q + 30 MC = 0.2q + 2 The profit maximizing level of output is a. 0 b. 30 c. 40 d. 50 ANSWER: c 6. If a firm wished to maximize total revenues it should produce where a. marginal cost is zero. b. marginal revenue is zero. c. marginal revenue is equal to marginal cost. d. marginal revenue is equal to price. ANSWER: b 16. Which of the following conditions would result in the short run marginal cost curve not correctly reflecting the supply behavior of a profit maximizing firm? a. The firm is a price taker. b. Price exceeds average total cost. c. The elasticity of demand facing the firm is -3. d. The firm can vary several inputs in the short run. ANSWER: c NOTES: Please explain the above answers. Show all the steps. Do not copy the solutions already posted. Thanks.
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To find the marginal revenue function, we need to take the derivative of the demand function with respect to quantity (Q). The demand function is Q = 50 - 10P. To find the marginal revenue function, we need to find the derivative of Q with respect to P. First, Show more…
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