Question

Consider the market for pop. Use the demand and supply equations.

Qd

​=

100minus−20P

Qs

​= 5P

What is the marginal benefit of the

10th

can of​ pop?

Answer 1

Marginal Benefit is same as the Inverse Demand curve.

So, Marginal Benefit = Inverse Demand curve

As, Demand curve :-  

Q_{​​​​​​d}​​​​​ = 100 - 20P

​​​​​​20P = 100 - Q_{​​​​​​d}​

P = (100 - Q_{​​​​​d} ) / 20

Inverse Demand curve :- P = (100 - Q_{​​​​​d} ) / 20

So, At Q = 10

P = (100 - 10) / 20

P = 90/20 = 4.5

​​​​​​So, Marginal Benefit is 4.5 from the 10^th can of pop.

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