Question

Study the following demand schedule and answer the following question.

$\begin{array}{cc}Price\left(Rs\right)& Quantity\\ 11& 0\\ 10& 100\\ 9& 200\\ 8& 300\\ 7& 400\\ 6& 500\\ 5& 600\\ 4& 700\end{array}$

At what price does MR become negative for the first time?

• A. Rs 7
• B. Rs 6
• C. Rs 5
• D. Rs 4

Answer 1

The correct option is C

Rs 5

Let's add the TR and MR columns to the table where
$TR=P\times Q;\&MR=\frac{\Delta TR}{\Delta q}$

$\begin{array}{cccc}P\left(Rs\right)& Q& TR\left(Rs\right)& MR\left(Rs\right)\\ 11& 0& 0& 10\\ 10& 100& 1000& 8\\ 9& 200& 1800& 6\\ 8& 300& 2400& 4\\ 7& 400& 2800& 2\\ 6& 500& 3000& 0\\ 5& 600& 3000& -2\\ 4& 700& 2800& -\end{array}$

It can be seen that MR becomes -2 at a price of 5.