1. The ëstimated demand curve för a firm's product is represented by the equation: Q = 66000 – 10P where Q is the quantity sold per year and P is the price per unit. (a) Based on the estimated demand curve, write the equations for (i) (ii) total revenue average revenue (iii) marginal revenue (b) What is the maximum total revenue per year that the firm can obtain from sales of its product? (Give the exact dollar amount and show how you determined it.) (c) Calculate the point price elasticity of demand for the firms' product when Q= 50000 . Is the demand elastic or inelastic at that quantity? How do you know? %3D

1. The ëstimated demand curve för a firm's product is represented by the equation: Q = 66000 – 10P where Q is the quantity sold per year and P is the price per unit. (a) Based on the estimated demand curve, write the equations for (i) (ii) total revenue average revenue (iii) marginal revenue (b) What is the maximum total revenue per year that the firm can obtain from sales of its product? (Give the exact dollar amount and show how you determined it.) (c) Calculate the point price elasticity of demand for the firms' product when Q= 50000 . Is the demand elastic or inelastic at that quantity? How do you know? %3D

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter1A: Appendix: Working With Graphs

Section: Chapter Questions

Problem 1E

See similar textbooks

Similar questions

profit maximization price combinationA state owned company is providing electricity at the priceof $0.105and faces the demand for electricity P=1.255 - 0.001Q The company has acost function C(Q)=100.625 + 0.105Q The state sells the firm, now the firm’sonly goal is profit maximizationa What is the number of kilowatt hours of electricityproduced and what is the price that the company will charge?b Compute the price elasticity at the profit maximizingprice combinationc How much more profit will this firm make as a result ofprivatization
The monthly sales of Sunny Electronics' new sound system are given by q(t) = 2,000t − 50t2 units per month, t months after its introduction. The price Sunny charges is p(t) = 1,000 − t2 dollars per sound system, t months after introduction. Find the rate of change of monthly sales. HINT [See Example 4(a).] q'(t) = Find the rate of change of the price. p'(t) = Find the rate of change of monthly revenue 5 months after the introduction of the sound system. $ per month Interpret your answer. When t = , the revenue is increasing at a rate of $ per month.
For problems 1 – 4: The Dolan Corporation, a maker of small engines, determines that in 2019 the demand curve for its product is P = 2,000 - 50Q where P is the price (in dollars) of an engine and Q is the number of engines sold per month. To sell 30 engines per month, what price would Dolan have to charge? A.4500 b.1000 c.500 d.450
A market analysis employed by the “Sad Student Company” reveals that the number oflots of the game named “Handsome Killer: Revenge of the Teacher” ordered by thewholesalers when the game is offered at a price of dollars per lot is given by the formula:p=1500-2.5qa) Find the company’s total, marginal and average revenues b) Find the price and quantity maximizing the total revenue by first expressing therevenue as a function of price rather than of quantity
describe the factors that drive sales and revenue:IncomeAdvertisingPreferencesPricingCompetitor pricingRegulatory environmentInternational factors
need d and e rest part are solved answer is here Solution:- Given Monthly demand function: Q=300-4P .... (1) Cost function: TC=15Q+1000 ..... (2) Part a Revenue = Price * quantity Q=300-4P⇒4P=300-Q⇒P=75-0.25Q So R=PQR=75-0.25QQR=75Q-0.25Q2 ... (3) To maximize revenue, differentiate the equation 3 with respect to Q dRdQ=75-0.5Q Put dRdQ=075-0.5Q=0⇒0.5Q=75⇒Q=150 Second-order condition for revenue maximization: d2RdQ2=-0.5<0 Revenue is maximization quantity is 150 From equation 3 R=75×150-0.25×1502R=5625 The maximum revenue is $5625 part b Differentiate equation 1 with respect to Q dQdP=-4 Price elasticity is calculated as e=dQdP×PQe=-4×75-0.25×150150e=-4×0.25e=-1 Price elasticity at revenue-maximizing point is -1 part c Total cost of producing 150 units: TC=15×150+1000TC=3250 Profit at revenue-maximizing level of output: Profit = revenue - costProfit =5625-3250Profit =2375
Eyeglasslux is a single-price monopolist in the eye-glass frame market. It faces a Market demand given by Q=355-2P. Its only cost is a Marginal Cost of MC=Q What is the Marginal Revenue for the 268th unit?
7. A paint store sells 270 pails of paint per month at a price of $32 each. A customersurvey indicates that for each $1.20 decrease in price, sales will increase by 6pails of paint.(a) Determine the demand, or price, function.(b) Determine the revenue function (using (a)).(c) Determine the marginal revenue function.(d) Solve R’(x) = 0. Interpret the meaning of this value for this situation.(e) What is the price that corresponds to the value found in part (d)?
2. A car importer was preparing in September 2021 to accept the 2022 models. In order to clear the stock of cars of older models, it offered in August 2021 a discount of €1,750 from the normal price of €52,500. As a result, sales increased from the average level of 50 units to 75 units in the month of August. (a) On the basis of the normal price, calculate the price elasticity. b) What discount had to be made in September in order to sell the remaining stock of 90 cars of model 2021?
7. (Ad Valorem) What is the effect of an ad valorem tax of v (the share of the price that goes to the government) on a competitive firm's profit-maximizing output given the marketprice is unaffected?
a. A firm faces the following average revenue (demand) curve:P = 120 − 0.02Qwhere Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 60Q + 25,000. Assume that the firm maximizes profits. i. What is the level of production, price, and total profit per week?ii. If the government decides to levy a tax of 14 cents per unit on this product, what will be the new level of production, price, and profit?
Where did the numbers come from for this part? And the membership fee will be equal to the consumer surplus, that will be: 5$200-$349.25=$4,851