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Question 286239: Marginal Revenue: A defense attorney charges her client $4000 plus $120 per hour. The formula R = 120n + 4000 gives her revenue in dollars for n hours of work. What is her revenue for 100 hours of work? What is her revenue for 101 hours of work? By how much did the one extra hour of work increase the revenue? (The increase in revenue is called marginal revenue for the 101st hour)
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! Equation is y = 4000 + 120*x
Graph of that equation is shown below:
Horizontal lines are at y = 16000 and y = 16120.
Those correspond to x = 100 and x = 101.
With 100 hours of work, she makes $16,000.
With 101 hous of work, she makes $16,120.
The increase in work hours from 100 hours to 101 hours increased her work revenue by 1 hours * 120 dollars per hour = $120.00.
This stands to reason, since once the $4000 is paid up front, the rest is just incremental based on dollars per hour.
The percent increase will vary but the actual increase will be the same.
Example:
From 50 hours to 51 hours, the actual increase is $120.
50 hours = 4000 + 50 * 120 = $10,000.
51 hours = 4000 + 51 * 120 = $10,120.
The percent increase is 10120/10000 = 1.2%.
From 100 hours to 101 hours, the actual increase is $120.
100 hours = 4000 + 100 * 120 = $16,000.
101 hours = 4000 + 101 * 120 = $16,120.
The percent increase is 16120/16000 = 0.75%.
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