Let’s verify a few things from Slide 11 in the lecture. For convenience, the total revenue is givenby TR= (40−1/2Q)Q, and the inverse demand function is given by p= 40−1/2Q.  a) Find when total revenue is maximized. b) Choose any quantity less than when when total revenue is maximized. Calculate

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Let’s verify a few things from Slide 11 in the lecture. For convenience, the total revenue is givenby TR= (40−1/2Q)Q, and the inverse demand function is given by p= 40−1/2Q. 

a) Find when total revenue is maximized.

b) Choose any quantity less than when when total revenue is maximized. Calculate the elasticityof demand. Does this point exhibit elastic or inelastic demand?

c) Choose any quantity greater than when total revenue is maximized. Calculate the elasticityof demand. Does this point exhibit elastic or inelastic demand?

d) What is the elasticity of demand when total revenue is maximized?

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