Consider a market for custom plastic cups. The demand function is D(p) = 100 - 2p and supply S(p) = 4p-20. a. Calculate the elasticity of demand at any price. b. What is the equilibrium price? What is the elasticity of demand in equilibrium? C. d. Are revenues maximized at the equilibrium price? How do you know? If not, what should firms do to increase revenues?
Consider a market for custom plastic cups. The demand function is D(p) = 100 - 2p and supply S(p) = 4p-20. a. Calculate the elasticity of demand at any price. b. What is the equilibrium price? What is the elasticity of demand in equilibrium? C. d. Are revenues maximized at the equilibrium price? How do you know? If not, what should firms do to increase revenues?
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 6PA: Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000)...
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