EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 15, Problem 3SPPA
To determine
The calculation of marginal revenue, its comparison with price and the type of market is to be determined.
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Walkers’ Shoes reports the following demand schedule for its black brogues.
Price
1600
800
400
200
100
50
25
12.5
Quantity Demand
2
4
8
16
32
64
128
256
What is the effect on Walkers Shoes’ total revenue of doubling the quantity of shoes which it supplies? What is the value of its marginal revenue? How does your answer relate to the value of the price elasticity of demand?
Refer to the demand schedule below.
a. Use the following demand schedule to calculate total revenue and marginal revenue at each quantity.
Instructions: Enter your answers rounded to two decimal places. If you are entering any negative numbers be sure to include a
negative sign (-) in front of those numbers.
Quantity
Demanded (Q)
Price (P)
Total Revenue
Marginal Revenue
$7.00
0.00
6.50
24
6.50
%24
6.50
6.00
12.00 $
5.50
5.50
%24
16.50
24
4.50
5.00
4.
24
20.00
%24
3.50
4.50
24
22.50 $
2.50
4.00
%24
24.00 $
1.50
3.50
%24
24.50
24
0.50
3.00
8.
24.00
24
-0.50
2.50
22.50
24
-1.50
26
Tools
24
TR
22
20
TR
D.
18
16
14
12
MR
10
8.
4
D.
MR
-2
0 1 2 3 4 5 6 7 8 9 10
Quantity
Instructions: Enter your answers rounded to two decimal places. For each segment, be sure to enter the highest price first.
c. Use Chapter 6's total-revenue test for price elasticity to designate the elastic and inelastic segments of your graphed demand curve.
Demand is elastic from a price of $
Demand is inelastic from a…
Instructions: Enter your answers rounded to two decimal places. For each segment, be sure to enter the highest price first.
c. Use Chapter 6's total-revenue test for price elasticity to designate the elastic and inelastic segments of your graphed demand curve.
Demand is elastic from a price of $
Demand is inelastic from a price of $
to a price of $
to a price of $
d. In general, when marginal revenue is positive, demand is elastic
When marginal revenue is negative, demand is inelastic
e. Suppose the marginal cost of successive units of output is zero. What output would the profit-seeking firm produce? (Assume the
firm can only produce whole units.)
Chapter 15 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 15 - Prob. 1SPPACh. 15 - Prob. 2SPPACh. 15 - Prob. 3SPPACh. 15 - Prob. 4SPPACh. 15 - Prob. 5SPPACh. 15 - Prob. 6SPPACh. 15 - Prob. 7SPPACh. 15 - Prob. 8SPPACh. 15 - Prob. 9SPPACh. 15 - Prob. 10SPPA
Ch. 15 - Prob. 11SPPACh. 15 - Prob. 1IAPACh. 15 - Prob. 2IAPACh. 15 - Prob. 3IAPACh. 15 - Prob. 4IAPACh. 15 - Prob. 5IAPACh. 15 - Prob. 6IAPACh. 15 - Prob. 7IAPACh. 15 - Prob. 8IAPACh. 15 - Prob. 9IAPACh. 15 - Prob. 10IAPACh. 15 - Prob. 11IAPACh. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Prob. 3MCQCh. 15 - Prob. 4MCQCh. 15 - Prob. 5MCQCh. 15 - Prob. 6MCQCh. 15 - Prob. 7MCQCh. 15 - Prob. 8MCQ
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