Q.1 (C)(ii) If the marginal revenue R_m = 40 and elasticity of demand η is 5, then the average revenue R_A will be ____.

Answer: 50 R_m = R_A(1 - 1/η). So 40 = R_A(1 - 1/5) = 4/5R_A, giving R_A = 50.

If the marginal revenue \(R_m = 40\) and elasticity of demand \(\eta\) is 5, then the average revenue \(R_A\) will be ____.

Q.1 (C)(ii) If the marginal revenue \(R_m = 40\) and elasticity of demand \(\eta\) is 5, then the average revenue \(R_A\) will be ____.

Doubtly Asked 29 Oct 2026 Board exam · July 2024 hsc 12th Save WhatsApp Report

Best answer

Answer: 50

\(R_m = R_A\left(1 - \dfrac{1}{\eta}\right)\). So \(40 = R_A\left(1 - \dfrac{1}{5}\right) = \dfrac{4}{5}R_A\), giving \(R_A = 50\).

Doubtly AI · 29 Oct 2026 AI-verified · Nov 2026 Report

Was this answer helpful?