Demand Analysis in Monopoly

The general form of the demand relationship is

QD = a – bP or, P = a/b – (1/b)QD

total revenue = TR = "P"×"Q = (a/b)QD – (1/b)" "Q" _"D" ^"2"

MR = ΔTR/ΔQ = (a/b) – (2/b)QD

AR = TR/QD.

In the monopoly market model, AR is the same as the market demand schedule.