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If the marginal revenue of a firm is constant, then the demand function is ________ (a) MR (b) MC (c) C(x) (d) AC |
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Answer» (a) MR MR = k (constant) Revenue function R = ∫(MR) dx + c1 = ∫kdx + c1 = kx + c1 When R = 0, x = 0, ⇒ c1 = 0 R = kx Demand function p = R/x = kx/x = k constant ⇒ p = MR |
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