Answer :
The correct marginal revenue function, based on the given demand function, is MR = 116 - 2q. This reflects the nature of monopolies, where price and revenue are influenced by the quantity of goods sold.
Firstly, let's clarify some terms. The demand function in economics refers to a mathematical function showing the quantity of a good that consumers are willing and able to purchase at different price levels. Marginal revenue (MR), on the other hand, is the additional revenue that a firm receives from selling one more unit of a good.
You've given a demand function for a monopoly's product as p = 116 - 1a. However, I believe there might be a typo here and instead it should be p = 116 - q, where 'p' represents the price and 'q' is the quantity of goods sold.
This function implies that the price of the product decreases as the quantity sold increases. This is a typical characteristic of a monopoly where the firm is the sole producer and thus can influence the price of the product.
Now, the marginal revenue function for a monopoly is typically double the slope of the demand function. So, if the demand function is p = 116 - q, the marginal revenue function should be MR = 116 - 2q. This suggests that the revenue gained from selling an additional unit decreases as the quantity sold increases.
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