2. Calculating marginal revenue from a linear demand curve Theblue curve on the following graph represents the demand curvefacing a firm that can set its own prices. Use the graph input toolto help you answer the following questions. You will not be gradedon any changes you make to this graph. Note: Once you enter a valuein a white field, the graph and any corresponding amounts in eachgrey field will change accordingly.0123456789101009080706050403020100PRICE (Dollars per unit)QUANTITY(Units)Demand Graph Input Tool Market for Goods Quantity Demanded(Units) Demand Price (Dollars per unit) On the graph input tool,change the number found in the Quantity Demanded field to determinethe prices that correspond to the production of 0, 2, 4, 5, 6, 8,and 10 units of output. Calculate the total revenue for each ofthese production levels. Then, on the following graph, use thegreen points (triangle symbol) to plot the results. TotalRevenue0123456789102502252001751501251007550250TOTAL REVENUE(Dollars)QUANTITY (Number of units) Calculate the total revenue ifthe firm produces 2 versus 1 units. Then, calculate the marginalrevenue of the second unit produced. The marginal revenue of thesecond unit produced is . Calculate the total revenue if the firmproduces 4 versus 3 units. Then, calculate the marginal revenue ofthe fourth unit produced. The marginal revenue of the fourth unitproduced is . Based on your answers from the previous question, andassuming that the marginal revenue curve is a straight line, usethe black line (plus symbol) to plot the firm's marginal revenuecurve on the following graph. MarginalRevenue0123456789101009080706050403020100-10-20MARGINAL REVENUE(Dollars)QUANTITY (Units) Comparing your total revenue graph toyour marginal revenue graph, you can see that when total revenue isdecreasing, marginal revenue is ??. Calculate the totalrevenue if the firm produces 4 versus 3 units. Then, calculate themarginal revenue of the fourth unit produced. The marginal revenueof the fourth unit produced is Based on your answers from theprevious question, and assuming that the marginal revenue curve isa straight line, use the black line (plus symbol) to plot thefirm's marginal revenue curve on the following graph. On the graphinput tool, change the number found in the Quantity Demanded fieldto determine the prices that correspond to the production of 0,2,4,5,6,8, and 10 units of output. Calculate the total revenue foreach of these production levels. Then, on the following graph, usethe green points (triangle symbol) to plot the results. Calculatethe total revenue if the firm produces 2 versus 1 units. Then,calculate the marginal revenue of the second unit produced. Themarginal revenue of the second unit produced is
