
Figure 9.2 A Linear Demand Curve and Its Marginal Revenue Curve
A linear demand curve has a marginal revenue curve with the same vertical intercept and twice the slope. Here, the demand curve
D is given by
P = 100 – 10
Q. The associated marginal revenue curve is therefore
MR = 100 – 20
Q. If
Q = 4, for example, then
P = $60 and
MR = $20.