1. The demand equation of a good is given by P+2Q-20 and the total cost function is Q³-8Q2+20Q+2 a) Find the level of output that maximizes total revenue. b) Find the maximum profit and the value of Q at which it is achieved. Verify that, at this value of Q, MR-MC.
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- An end-of-aisle price promotion changes the price elasticity of a good from −3 to −4. Suppose the normal price is $18, which equates marginal revenue with marginal cost at the initial elasticity of –3. What should the promotional price be when the elasticity changes to –4? (Hint: In other words, what price will equate marginal revenue and marginal cost?)1. If a firm's average variable cost curve decreases when the firm increases its output, then the firm is below the shutdown/operate output level. A. True B. False 2. If the cross-price elasticity of demand between good A and good B is -1.25, then the goods are A. substitute goods. B. complimentary goods. C. not related to each other at all.Demand for Corn Flakes is: P = 26 - Q. Supply of Kellogg's Corn Flakes is: P = 2 + Q. Now a generic company enters the market, selling generic Corn Flakes for $6. Assume consumers are indifferent between generic and Kellogg's Corn Flakes. How many boxes of Kellogg's (brand) Corn Flakes will sell? Enter as a value.
- Assuming a simple linear market demand curve for good X, explain the relationship between price, total and marginal revenues, and elasticity of demand. Using your answer, explain why might a revenue maximizing firm selling a luxury good reduce its product price.Suppose that the price of product X rises by 12 percent and the quantity supplied of X increases by 15 percent. The coefficient of price elasticity of supply for good X is Multiple Choice negative, and therefore X is an inferior good. positive, and therefore X is a normal good. more than 1, and therefore supply is elastic. less than 1, and therefore supply is inelastic.the demand equation for a product is q=1.5p+600, where q is the number of a products that can be sold in a month and p is the price per product. (a) what price will produce the largest revenue? (b) what is the largest monthly revenue?
- 1. Which of the following might increase product price from P3 to P5? a. An improvement in production technology. b. A decline in the price of a substitute good. c. An increase in the price of a complementary good. d. Rising incomes if the product is a normal good. 2. An increase in price from P3 to P5 would: a. shift this firm’s MC curve to the right. b. mean that MR5 exceeds MC at Q3 units, inducing the firm to expand output to Q5. c. decrease this firm’s average variable costs. d. enable this firm to obtain a normal, but not an economic, profit. 3. At P4: a. this firm has no economic profit. b. this firm will earn only a normal profit and thus will shut down. c. MR4 will be less than MC at the profit-maximizing output. d. the profit-maximizing output will be Q5. 4. Suppose P4 is $10, P5 is $15, Q4 is 8 units, and Q5 is 10 units. This firm’s: a. supply curve is elastic over the Q4–Q5 range of output. b. supply curve is…The demand function for a soda is Q=20-2P , where Q stands for quantity and P for price. a)Calculate point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points? b)Calculate are elasticity at the interval between P=$5 and P=$6. c)At which price would a change in price and quantity result in approximately no change in total revenue? Why? d)If the supply function for the soda is Q= -5+3P, calculate the equilibrium price and quantity of soda and show them on a diagram. e)If the government imposes a floor price of $7, would you think that this floor price is binding.( Show your work on a diagram.)The price-demand equation for an order of fries at a fast food restaurant is given by the equation below. What price will maximize the revenue from selling fries? x+1,000p=800 Question content area bottom Part 1 The price that will maximize the revenue from selling fries is $enter your response here.
- Demand for Corn Flakes is: P = 17 - Q. Supply of Kellogg's Corn Flakes is: P = 2 + Q. Now a generic company enters the market, selling generic Corn Flakes for $5. Assume consumers are indifferent between generic and Kellogg's Corn Flakes. How many boxes of corn flakes will sell in total (both brand and generic)? Enter as a value.The price p (in dollars) and the quantity q sold of a certain product obey the demand Equation : q = 800 - 20p and 0 ≤ p ≤ 40 Express the revenue R as a function of q. What is the revenue if 20 units are sold? What quantity q maximizes revenue? What is the maximum revenue? What price should the company charge to maximize revenue? What price should the company charge to earn at least $3500 in revenue?Suppose you are given the following data on demand for a product. The price elasticity of demand (based on the midpoint formula) when price decreases from $8 to $6 is Price Quantity Demanded $ 10 30 9 40 8 50 7 60 6 70 Multiple Choice 0.86. 0.33. 1.14. 1.33.
