Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

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Answer 1

Question

Chapter 8, Problem 8.3P

A

To determine

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

B

To determine

Explain with reasons as to the intercept shown in part A, showing the quantity where the total revenue is maximized that is available on the demand curve.

C

To determine

State the reasons for the price elasticity of demand being -1, at the current level of output.

D

To determine

Comment on the conclusions derived from parts A to C, using the curve form q=96-2P.

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Johnny Rockabilly has just finished recording his latest CD. The company can produce the CD with no fixed cost and a variable cost of $18 per CD. His record company's marketing department determines that the demand for the CD is as follows: Complete the following table by computing total revenue for each quantity listed and marginal revenue for each 5,000 increase in the quantity sold. Price Number of CDs Total Revenue Marginal Revenue (Dollars) (Dollars) (Dollars) 30 10,000 28 15,000 26 20,000 24 25,000 22 30,000 20 35,000 Profit is maximized at a quantity of $? CDs and a price of $ ? . This results in a profit of $ ? If you were Johnny's agent, you would advise Johnny to demand a recording fee of from the record company. $ ?

Use the following demand schedule to determine total revenue and marginal revenue for each possible level of sales: “Marginal revenue is the change in total revenue associated with additional units of output.” Explain verbally and graphically, using the data in the table.

Answer 2

Question

Chapter 8, Problem 8.3P

A

To determine

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

B

To determine

Explain with reasons as to the intercept shown in part A, showing the quantity where the total revenue is maximized that is available on the demand curve.

C

To determine

State the reasons for the price elasticity of demand being -1, at the current level of output.

D

To determine

Comment on the conclusions derived from parts A to C, using the curve form q=96-2P.

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Answer 3

Question

Chapter 8, Problem 8.3P

A

To determine

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

B

To determine

Explain with reasons as to the intercept shown in part A, showing the quantity where the total revenue is maximized that is available on the demand curve.

C

To determine

State the reasons for the price elasticity of demand being -1, at the current level of output.

D

To determine

Comment on the conclusions derived from parts A to C, using the curve form q=96-2P.

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Answer 4

Question

Chapter 8, Problem 8.3P

A

To determine

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

B

To determine

Explain with reasons as to the intercept shown in part A, showing the quantity where the total revenue is maximized that is available on the demand curve.

C

To determine

State the reasons for the price elasticity of demand being -1, at the current level of output.

D

To determine

Comment on the conclusions derived from parts A to C, using the curve form q=96-2P.

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Answer 5

Chapter 8, Problem 8.3P

A

To determine

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

B

To determine

Explain with reasons as to the intercept shown in part A, showing the quantity where the total revenue is maximized that is available on the demand curve.

C

To determine

State the reasons for the price elasticity of demand being -1, at the current level of output.

D

To determine

Comment on the conclusions derived from parts A to C, using the curve form q=96-2P.

Answer 6

Chapter 8, Problem 8.3P

A

To determine

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

Answer 7

Chapter 8, Problem 8.3P

A

To determine

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

Answer 8

B

To determine

Explain with reasons as to the intercept shown in part A, showing the quantity where the total revenue is maximized that is available on the demand curve.

Answer 9

B

To determine

Explain with reasons as to the intercept shown in part A, showing the quantity where the total revenue is maximized that is available on the demand curve.

Answer 10

C

To determine

State the reasons for the price elasticity of demand being -1, at the current level of output.

Answer 11

C

To determine

State the reasons for the price elasticity of demand being -1, at the current level of output.

Answer 12

D

To determine

Comment on the conclusions derived from parts A to C, using the curve form q=96-2P.

Answer 13

D

To determine

Comment on the conclusions derived from parts A to C, using the curve form q=96-2P.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 8.3 - Prob. 1MQ Ch. 8.3 - Prob. 2MQ Ch. 8.3 - Prob. 1.1MQ Ch. 8.3 - Prob. 2.1MQ Ch. 8.4 - Prob. 1TTA Ch. 8.4 - Prob. 2TTA Ch. 8.4 - Prob. 1MQ Ch. 8.4 - Prob. 2MQ Ch. 8.5 - Prob. 1TTA Ch. 8.5 - Prob. 2TTA

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

Solution Summary: The author explains the concept of analyzing the benefits of an action and comparing them to the costs incurred with the same action.

Concept explainers

Demonstrate that the horizontal intercept of the marginal revenue curve is precisely half of the value of the horizontal intercept of the demand curve.

Explain with reasons as to the intercept shown in part A, showing the quantity where the total revenue is maximized that is available on the demand curve.

State the reasons for the price elasticity of demand being -1, at the current level of output.

Comment on the conclusions derived from parts A to C, using the curve form q=96-2P.

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