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P5 June 2009 Qs 4

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › P5 June 2009 Qs 4

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by Ken Garrett.
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  • October 18, 2015 at 2:20 pm #277006
    peter1009
    Member
    • Topics: 8
    • Replies: 4
    • ☆

    Hi

    Where does the figures/formula for TR and MR come from?
    I understand that Po = 400 + (0.25×1,440) = $760
    and therefore Px = 760 – 0.25X

    TR = 760X – 0.25X squared (why?)
    MR = 760 – 0.5X (why?)
    MC = 200 (2 persons x $100)

    Thanks

    October 18, 2015 at 5:29 pm #277022
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    Po = 760 – 0.25 X

    Revenue = Price x Quantity = Po X = 760X = 0.25 X^2

    The mathematical way to get from Revenue to Marginal revenue requires you to differentiate this function to give Mr = dR/DX.

    HOwever, you would not have been required to carry out that step. Instead a formula would have been provided in the exam something like:

    If revenue, R = aQ – bQ^2
    MArginal revenue = MR = a – 2bQ

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