Problem 6. An economist has estimated the demand equation of a certain product as Q=100-2.5P where P is the price unit a
Posted: Sun Jul 03, 2022 6:50 am
Problem 6. An economist has estimated the demand equation of a certain product as Q=100-2.5P where P is the price unit and Q is the quantity demanded (in thousands) per year.
a.Calculate and interpret the own price elasticity of demand of the product when its price goes from $10 to $15 per unit.
b. Calculate the own price elasticity when price is P=30. Is demand elastic, unit-elastic or inelastic at price P-$30? Will you raise or lower price to increase revenue?
c. Determine the total consumer value when price is P=$30.
d. Suppose the inverse demand function for a monopolist's product is given by P-230-1.5Q and the total cost function is TC=500+300+3.50Q^2 so that its marginal cost is MC=30+7Q
e. Determine the marginal revenue (MR) as a function of Q.
f. Determine the profit-maximizing price and quantity.
g. Determine the maximum profits.
all these are included in one question. Thank you!
a.Calculate and interpret the own price elasticity of demand of the product when its price goes from $10 to $15 per unit.
b. Calculate the own price elasticity when price is P=30. Is demand elastic, unit-elastic or inelastic at price P-$30? Will you raise or lower price to increase revenue?
c. Determine the total consumer value when price is P=$30.
d. Suppose the inverse demand function for a monopolist's product is given by P-230-1.5Q and the total cost function is TC=500+300+3.50Q^2 so that its marginal cost is MC=30+7Q
e. Determine the marginal revenue (MR) as a function of Q.
f. Determine the profit-maximizing price and quantity.
g. Determine the maximum profits.
all these are included in one question. Thank you!