Suppose the Demand Curve for a Firm Is Q =

question 32

Multiple Choice

Suppose the demand curve for a firm is Q = 50 - 0.125P, where Q measures units of output and P is the price per unit. The value of marginal revenue at 20 units of output is $____.

• A) 240
• B) 200
• C) 160
• D) 80

---

Definitions:

Degree Of Total Leverage

A measure that quantifies the sensitivity of a company's earnings before interest and taxes to a change in its sales.

Financial Leverage

The use of borrowed capital or debt to increase the potential return of an investment.

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the extent to which a company can increase its profits by increasing sales.

Modigliani-Miller Model

A foundational financial theory proposing that the market value of a company is determined by its earning power and risk of its underlying assets, and is independent of the way it chooses to finance its investments or distribute dividends.